Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Royal Assent

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

The Consolidated Fund Act 1991
The Community Charges (Substitute Setting) Act 1991

PRIVATE BUSINESS

CARDIFF BAY BARRAGE BILL [Lords] (By Order)

Order for further consideration, as amended, read.

To be considered on Tuesday 16 April at Seven o'clock.

Mr. Speaker: As Bills 1 to 8 have blocking motions, with the leave of the House I shall put them together.

CATIEWATER RECLAMATION BILL (By Order)

HOOK ISLAND (POOLE BAY) BILL (By Order)

LONDON DOCKLANDS RAILWAY (LEWISHAM, ETC.) BILL (By Order)

EAST COAST MAIN LINE (SAFETY) BILL (By Order)

LONDON REGIONAL TRANSPORT (PENALTY FARES) BILL (By Order)

LONDON UNDERGROUND (KING'S CROSS) BILL (By Order)

REDBRIDGE LONDON BOROUGH COUNCIL BILL (By Order)

BRITISH RAILWAYS (No. 3) BILL [Lords] (By Order)

Orders for Second Reading read.

To be read a Second time on Thursday 18 April.

TAY ROAD BRIDGE ORDER CONFIRMATION BILL

Mr. Secretary Lang presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Tay Road Bridge and the same was read the First time; and ordered to be considered upon Wednesday 27 March and to be printed. [Bill 121.]

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Food Labelling

Mr. David Shaw: To ask the Minister of Agriculture, Fisheries and Food what future arrangements he will be making for monitoring the accuracy of food labelling as a result of information recently gained by his Department relating to orange juice.

Mr. Simon Coombs: To ask the Minister of Agriculture, Fisheries and Food what future arrangements he will be making for monitoring the accuracy of food labelling as a result of his Department's recent information about the labelling of orange juice.

The Minister of Agriculture, Fisheries and Food (Mr. John Gummer): My scientists analyse a wide range of foodstuffs for various reasons as part of our comprehensive programme of monitoring and surveillance. I will be following up the particular matter to which my hon. Friends refer with further sampling.

Mr. Shaw: I congratulate my right hon. Friend and his officials on the way in which this monitoring has been done and on the fact that some major mistakes have been identified. Members of the British public who, like me, enjoy a daily glass of orange juice and want it pure, undiluted and from a properly labelled carton are very grateful to him.

Mr. Gummer: I thank my hon. Friend for that. The fact is that this was a labelling and not a public health matter, but it is not acceptable that orange juice labelled pure and unadulterated should turn out to be rather less unadulterated than it should be.

Mr. Coombs: Will my right hon. Friend accept my congratulations on this matter? It will give the British public a great deal of reassurance to know that they have officials in the Ministry of Agriculture, Fisheries and Food continually on the watch to protect them from such serious abuse of the food labelling regulations. When may we expect to make further progress with food labelling regulations, finish the period of discussion with our European colleagues and introduce a more comprehensive system of food labelling regulations for fats, salt and sugar?

Mr. Gummer: My hon. Friend has always taken a great interest in this. I assure him that we are in the lead in matters to do with food labelling. The Food Advisory Committee has been doing work on this in Britain. Much of labelling is now in the European Community domain, of course, and we take a lead in the Community in ensuring that the public have clear labelling of what is in the products that they buy. It is not my intention to tell the public what they ought to eat; it is my intention to allow them to choose for themselves—that is why they need proper labels.

Countryside (Access)

Mr. Andrew F. Bennett: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about access to the countryside in set-aside areas and environmentally sensitive areas.

Mr. Gummer: Existing rights of public access are preserved over land which is entered under the set-aside and environmentally sensitive areas schemes. Neither scheme imposes additional obligations as regards access, but the meadowland option of the related countryside premium scheme provides areas set aside for walking and quiet enjoyment by the public.

Mr. Bennett: Does the Minister agree that, as more than 10 million people enjoy walking as a pastime, at Easter and on other public holidays many honey spots in the countryside will be overused and peace and quiet will be denied to people going out to enjoy them? Is not there a good argument for increasing the number of parts of Britain to which people can gain access and spreading the money that people spend when they go out into the countryside? Will the Government try to incorporate in the set-aside and environmentally sensitive schemes some encouragement to farmers to improve access?

Mr. Gummer: I think that access is best improved by improving footpaths, bridleways and the like. We must also recognise that in all these areas a balance must be maintained. In our environmentally sensitive areas it is sometimes access that causes much of the problem. I cite for instance, the difficulties in the South Downs where access for people with dogs makes it extremely difficult to graze those areas in the way that would be desirable. I also remind the hon. Gentleman that problems in the Pennine Way now mean that in some cases and circumstances we are spending more there than on similar lengths of the M1.

Mr. Jopling: Is my right hon. Friend aware that, with the exception of the small areas that he mentioned, there is no particularly good reason why environmentally sensitive areas should have special access to the public, bearing in mind that huge areas of equally sensitive land often adjoin them? My right hon. Friend should concentrate on trying to expand the environmentally sensitive areas, which have been so successful.

Mr. Gummer: I am sure that my right hon. Friend will not mind my saying that such areas are his creation. The fact that the whole of Europe is copying Britain in creating such areas owes much to his perseverance in the Council of Ministers. I should like to see how best we can extend the scheme as time goes on. I emphasise my right hon. Friend's argument that access must often compete with other aspects of the countryside to achieve a balance. To conserve the countryside, we must sometimes restrict rather than extend access. Environmentally sensitive areas will work only if farmers can farm them properly, so we must ensure that the demands and needs of farming play their part in the balance between them.

Mr. Geraint Howells: Has the Minister any plans to introduce compulsory set-aside if the current scheme does not work out to his satisfaction?

Mr. Gummer: The hon. Gentleman will know that I am deeply opposed to the concept of compulsory set-aside, which is damaging both to the countryside and to the

farmer. I seek a system in the European Community in which each country will take a fair share of the amount of set-aside necessary. A voluntary scheme should set a target to be achieved within each country. A voluntary scheme means that farmers must be paid enough to make it possible for them to look after the land, which is in their interests and the wider interests of the country as a whole.

Mr. Boscawen: My right hon. Friend is absolutely right to say that we must get the balance right in environmentally sensitive areas. In the Somerset levels, which I represent, there is a genuine need for a limited amount of access to see the birds and fauna there. However, if too many people want to come at once, as they often do, they will destroy the areas that we wish to protect.

Mr. Gummer: My hon. Friend is right. We have spent a lot of money and employed much manpower, especially in the Somerset levels, to try to achieve a balance between the needs of farming and those of wildlife. We have discovered that, by bringing both sides together, the level of water necessary turns out to be very different from that which many conservationists had thought. When one is trying to bring two groups together in such a way, it must be realised that total access to the general public cannot always be afforded if wildlife is to be protected. It is important to achieve a balance. The hon. Member for Denton and Reddish (Mr. Bennett) is among the first to say that he wants not access which destroys the countryside but access which opens it up.

Mr. David Clark: Has the Minister seen the report published today by the national parks review panel, in which he is urged to introduce incentives and payments systems for environmentally friendly farming and public access in all our national parks? Will he do so?

Mr. Gummer: I am not someone who, having read part of a report, immediately jumps to the Dispatch Box to say what he intends to do about it. First, I want to see what the Countryside Commission thinks about the report, as it was received only today. Secondly, the Secretary of State for the Environment and I will want to work out how best to react to the Countryside Commission's proposals. I am not someone who believes that the future of the countryside can be decided by immediate party-political reactions.

Food Prices

Sir Michael Shaw: To ask the Minister of Agriculture, Fisheries and Food what is the increase in the price of food to consumers as measured against the retail prices index since 1979.

Mr. Ian Taylor: To ask the Minister of Agriculture, Fisheries and Food by how much food prices to the consumer have increased since 1979 relative to the retail prices index.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. David Curry): Since 1979 the price of food has fallen by more than 18 per cent. relative to the retail prices index.

Mr. Michael Shaw: I thank my hon. Friend for that reply. Does he agree that that success story owes much to the efforts of British agriculture? Should we not also


realise, however, that those efforts demand a fair return for farmers who put both work and capital into their enterprises to bring about that success?

Mr. Curry: I agree with my hon. Friend that the factor that will most benefit the farmer is for us to get on top of inflation. The farmer makes a contribution towards defeating inflation because of the performance of food prices. It is also true that if the farmer wishes to benefit more from consumer spending, the more he can produce processed products that the consumer wants to buy, the better. Nobody goes into a a shop to buy sheep—they go to buy meat products and the more the farmer can get into that business, the more he will benefit from his own primary production.

Mr. Ian Taylor: My hon. Friend has just said something rather interesting—[Interruption.] It was not so much unusual, but it anticipated the flow of my own question.
Farmers may well have been contributing to the lowering of inflation. That is unfortunate for them in that they do not receive what they consider to be a proper rate of return. Does my hon. Friend agree that they should therefore concentrate their efforts on getting value added and adding some sex appeal to the crops that they sell?

Mr. Curry: It is true that people selling unbranded commodities will never receive the same return from them as the people who take the commodity, transform it, package it and give it new appeal. It is equally true that the consumer clearly wants the processed convenience product. The more that farmers can get into that business through greater collaborative effort and greater links with the retail trade, the more they will realise the benefits of their own primary production.

Mr. Beggs: Does the Minister accept that the price paid to the producers—farmers—is an extremely low percentage of the price paid by consumers? Does he also accept that unless a proper check is kept on the prices paid to producers there will inevitably be a shortfall in production, which will put prices to consumers through the ceiling? Will he endeavour to assist farmers in marketing their produce so that they can gain more for the agricultural produce of their farms?

Mr. Curry: We certainly try to take our decisions in European negotiations and in the Ministry with a view to helping British farmers get their products on the table in front of British housewives and other people. It is also true that the reason for lower returns in agriculture is the persistence of over-supply in the marketplace. The greatest service that we can do for a farmer is to conquer the problem of over-supply and inflation. When we can do that, the farmer will be able to realise his returns much more easily.

Mr. Skinner: Is the Minister aware that, notwithstanding the prices to which he refers, for the first time in the 21 years I have been a Member of Parliament, the farmers and farm workers in Bolsover, Derbyshire and other parts of the country are fed up to the back teeth with the Government and the common agricultural policy? They used to paint the grass blue in Bolsover at election time, but they have said that they will never do it again.

Mr. Curry: If the farmers were to vote for the hon. Gentleman, they would undergo a rapid learning curve and only make that mistake once.

Farm Gate Prices

Mr. Alexander: To ask the Minister of Agriculture, Fisheries and Food by what percentage farm gate prices have increased since 1979 relative to the retail prices index.

Mr. Curry: The index of producer prices of agricultural products increased at an average annual rate of 3·6 per cent. between 1979 and 1990, compared with 7·5 per cent. for all items in the retail prices index.

Mr. Alexander: Does my hon. Friend agree that the figures that he has produced show how essential it is, not least for the farmers in Bolsover, that my right hon. Friend the Chancellor of the Exchequer continues with policies that will bear down on inflation? When my hon. Friend goes to Brussels and talks to Commissioner MacSharry, will he give him those figures and ensure that if there is any reform of the common agricultural policy, as is proposed, the returns to British farmers all over the country will not be further reduced as a result?

Mr. Curry: My right hon. Friend and I will be in Brussels next Monday and Tuesday, when no doubt these subjects will be on the agenda. We agree with my hon. Friend. We have made it clear to Mr. MacSharry and our colleagues that, although we agree that changes must be made and that prices must fall closer to those of the marketplace, agriculture should be based on commercially viable farms and the United Kingdom farmer should not be discriminated against merely because he is efficient, modern and effective.

Mr. William Ross: How many other people in the food production chain from the farmer to the housewife have taken an actual cut in incomes since 1979?

Mr. Curry: Incomes will not be buoyant if the market is constantly over-supplied. If farmers wish to achieve better returns, the Government must conquer inflation and over-supply and take more interest in producing what the consumer wants in the form that the consumer wants it. If the consumer wants products that the farmer thinks inappropriate, it is the farmer and not the consumer who is wrong. There is only one market and it must deliver what the consumer wants.

Mr. Marland: I know that my hon. Friend is concerned about the drop in farm gate prices. Will he confirm that to raise farm gate prices farmers must add more value to their products? Will he further confirm that grant aid and advice is available from the Ministry to encourage and help farmers to find different ways of adding value to their products to make them more acceptable in the marketplace?

Mr. Curry: Farmers should certainly use all the help that is available. I do not wish to transform agriculture into some form of cottage industry producing pies and salami, but unless farmers get further down the food chain and produce goods that people want by adding value on the farm, they will be stuck with producing unbranded raw materials. As I said, people do not go into supermarkets to buy sheep—they buy products, which is what the farmer must produce.

Decommissioning

Mr. Austin Mitchell: to ask the Minister of Agriculture, Fisheries and Food when he intends to meet the National Federation of Fishermen's Organisations to discuss a decommissioning scheme.

Mr. Curry: I see the National Federation of Fishermen's Organisations regularly, and it is well aware of the Government's view on decommissioning.

Mr. Mitchell: In that case, it will be very depressed. Does the Minister recognise that the whole of the British fishing industry is crying out for a decommissioning scheme? Does he not recognise that that is the most effective contribution that he can make to conservation and that unless the Government introduce a proper conservation programme we shall get more daft Euro-measures imposed on us like the eight-day lay-off?

Mr. Curry: I thank the hon. Gentleman for any influence that he may have had on the letter that I received this morning from the Grimsby fish producer organisation thanking us for our excellent efforts in producing the gear option as an alternative to the tie-up scheme.
A decommissioning scheme is not the most effective method. Taking out old boats would be bad value and taking out new boats would be bad economics. If some boats are taken out under a decommissioning scheme, the remaining boats must be controlled to prevent them from simply mopping up all the additional effort; otherwise, there would have to be a new system of regulation, including compulsory tie-ups for longer periods than those that we unfortunately have at present.

Mr. John Townend: I am sure that my hon. Friend will appreciate that I do not welcome his remarks on a decommissioning scheme, but what other initiatives will he take to reduce the fishing effort? In particular, will he consider making it illegal for prawn fishermen to carry two sizes of net—70 mm and 90 mm—as that makes conservation enforcement practically impossible?

Mr. Curry: We have just completed a consultation with the industry. We considered whether we should introduce a square mesh panel on nets used for the nephrops fishery. We suggested a 70 mm square panel, but the industry said that it would like to go further. I shall do all that I can to go as far as possible so that we do not catch so many small round fish in the nephrops fishery. That is an important conservation measure.

Mr. Salmond: Does the Minister accept that he is totally isolated from the fishing community in his opposition to decommissioning and in his support for the eight-day tie-up? Does he understand that even members of the Conservative party are embarrassed by the contemptuous attitude that he showed to Scottish fishermen during the eight-day tie-up debate? When will there be a reversal of policy to support decommissioning and to oppose the life-threatening eight-day tie-up?

Mr. Curry: To be isolated is not necessarily to be wrong—and I do not accept that I am isolated. The hon. Gentleman's remarks about the previous debate are silly. He suggests that fishermen want to be able to fish exactly as they have always fished and yet to have conservation. That cannot be delivered.
If fishermen genuinely want conservation, they can take their suggestions about mesh sizes further forward. I shall always listen to them. Since I have been a fisheries Minister, not one hon. Member who has asked to bring a delegation of fishermen to see me has ever been refused. That offer remains open.

Mr. Morley: The Minister knows very well that he is isolated on the decommissioning issue in terms both of the industry and of Europe. The revision of the common fisheries policy provides an opportunity to use the available structural funds to finance a proper decommissioning scheme which takes account of all the points that the hon. Gentleman raised. Will he take the opportunity to tap into that funding? Will he also use the opportunity offered by the review of regional policies to extend the Hague preference south from Bridlington to include all the east coast ports?

Mr. Curry: I know that the Hague preference is a sensitive issue. It is designed for the northern communities. The Scottish industry attaches particular importance to it. Even the hon. Member for Banff and Buchan (Mr. Salmond) would agree that it is particularly important to the Scottish industry and to communities in northern England.
I realise that the Hague preference causes difficulties. As I am anxious that the review of the fisheries policy should be a limited review—I do not want the common fisheries policy to be busted open, because we benefit greatly from it—I should hesitate before introducing that element into the discussions, as it would encourage other people to seek a wider review than we think would be helpful.

Sheep Industry

Mr. Maclennan: To ask the Minister of Agriculture, Fisheries and Food what recent discussions he has had with British farmers about the future of the sheep industry; and if he will make a statement.

Mr. Curry: My colleagues and I have regular discussions with sheep farmers and their representatives.

Mr. Maclennan: How does the Minister propose to arrest the depressing erosion of incomes of hill and upland farms which are dependent upon the sheep industry? Will he do three things? Will he announce his proposals to end the sheepmeat variable premium? Will he support a private storage scheme to ease the undoubted danger of fluctuations occuring in the market following the ending of the variable premium scheme? May we have a five-year continuance of the wool guarantee, as wool constitutes some 14 per cent. of the incomes of sheep farmers in the hills and uplands?

Mr. Curry: We retain the option to accelerate the phase-out of the variable premium. When we take that decision, we shall certainly bear in mind the importance of accelerating our exports and getting rid of the clawback.
Giving a five-year guarantee is not a practical proposition. We recently increased the hill livestock compensatory allowances. About £400 million per year goes into the British sheep industry as a whole, a large proportion of it to the less-favoured areas. We recently increased HLCAs by £142 million. We have a system of market support in the livestock sector which costs us £800


million per year. That is a great deal of taxpayers' money to support the industry. We are committed to that industry.

Mr. Barry Field: Does my hon. Friend accept. that farmers are worried about the difference between the price that they get at market for their sheep for slaughter and the price that the housewife has to pay? Does he accept that, because of the demise of high street butcheries, farmers cannot easily sell their products to supermarkets, which refuse to take their produce locally? Will my hon. Friend's Department investigate that aspect of the red meat trade?

Mr. Curry: I have always found that when the farmers have some complaint about the retail sector, it is best to get the Women's Farming Union on to the matter. It appears to be the last paramilitary body in Britain and is extremely effective. I would hesitate to tell shops where to do their purchasing.

Mr. Pike: The Minister will know that sheep farmers are very unhappy about the severe financial difficulties in which they find themselves at present and are concerned about the Government's policy towards their industry. Will he assure them that there will be no repetition of the French lamb wars which, understandably, caused a major public outcry in Britain last year?

Mr. Curry: I hope that I have a certain amount of authority at the Ministry, but I am not sure that my writ extends to the behaviour of French farmers. I can only say to the hon. Gentleman that I attended a Paris show recently especially to advertise the qualities of British lamb on our stand there. We shall do our best to put our producers in touch with French buyers when we can supply what they want and we shall continue insistently to make it known to the French Government that we expect free trade for our product. Despite all the problems, we exported more live lambs to France last year than the year before.

Common Agricultural Policy

Mr. Jacques Arnold: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the reform of the common agricultural policy.

Mr. Butler: To ask the Minister of Agriculture, Fisheries and Food what progress he has to report on reform of the common agricultural policy.

Mr. Gummer: The Government continue to press for reforms of the common agricultural policy that will make European Community agriculture more market oriented, reduce budget costs, lead to closer integration between agricultural and environmental policies and apply fairly throughout the Community.

Mr. Arnold: My right hon. Friend is to be congratulated on the considerable efforts that he is putting into securing reform of the CAP. Will he make every effort to ensure, in any reforms that are achieved, that the British farmer will not be disadvantaged in relation to farmers on the continent?

Mr. Gummer: As British farmers have already gone through an agricultural revolution since the war, my hon. Friend would expect me to insist that it would be wrong

for them to be penalised a second time while other farmers failed to go through such a revolution. That is why we so utterly oppose the proposals that Mr. MacSharry has put before the Council.

Mr. Butler: Whatever reforms are adopted, will my right hon. Friend ensure that British farmers are not the only ones who have to stick by the rules and that farming practices throughout the Community are monitored properly?

Mr. Gummer: The most important thing is to get people to accept the tough side of a world, in which surplus production bears so heavily on farmers' incomes—that everybody must obey the same rules. We are considering carefully whether there are better ways in which to monitor observance of the rules throughout the Community and, indeed, in Britain, so that farmers can feel that there is a level playing field and a fair deal for all.

Mr. John D. Taylor: Does the Minister agree that some sectors of agriculture require reform more urgently than others? Does he accept that the growth in lamb production has reached the stage at which some constraints are urgently needed and is he sympathetic to the idea of quotas in the sheep sector?

Mr. Gummer: I do not think that quotas would be a good thing in general or in the United Kingdom in particular. In the past two or three years there has been an advance beyond sense in the number of lambs produced in some countries, but what is needed is a fair deal in the European Community to ensure that parts of the Community that produce excellent lambs should be able to continue to do so. As British lamb is, without doubt, the best in the world, we want it to continue to be produced and sold and we will not have those activities stopped by those who do not like the competition.

Dr. David Clark: May I associate the Opposition with the objectives outlined by the Minister in his initial answer to the question about reform of the CAP? Will he publish the Government's proposals for the CAP so that we can at least have the debate on our terms, not on the European Commissioners' terms?

Mr. Gummer: I thank the hon. Gentleman for his support for our policy, but the most important thing is that we should have a debate in the Council and on the Council's terms rather than having debates outside the Council to pat ourselves on the back.
My job is to get the Community to agree to a reform package. I do not think that the best way to do that is to suggest to the Community that it must accept some prepackaged presentation from this country. My job is to get people on our side. The opportunity for the hon. Gentleman and me to argue with each other here is not as important as the opportunity for both of us to achieve our joint desires in the Council. In those circumstances, the hon. Gentleman must accept that it is better to act through the Council which, in this area, has the authority.

Self-Sufficiency

Mr. Ralph Howell: To ask the Minister of Agriculture, Fisheries and Food what was the self-sufficiency of British agriculture in 1979–80, 1984–85 and 1989–90.

Mr. Gummer: Self-sufficiency in foods that can be produced in the United Kingdom was 71 per cent. in 1979–80, 80 per cent. in 1984–85 and about 74 per cent. in 1989–90.

Mr. Howell: I thank my right hon. Friend for his reply. Will he acknowledge the great contribution that British agriculture makes to the economy in general and the special contribution that is made by the cereals sector? Will he ensure that, in any future GATT negotiations, the aggressive attitude of the Americans is kept well in check?

Mr. Gummer: My hon. Friend could not say other than that, on this point, I have been as aggressive as any of the American negotiators. European farmers—British farmers among them—must have equal access to world markets. I will not accept measures that would improve the position of the United States but reduce the opportunities for Europe. However, concentration on self-sufficiency could easily hide the fact that we need to increase our sales in the rest of Europe, as well as the fact that our home market today is the whole of Europe, not merely the United Kingdom.

Mr. Cryer: Is not the balance of trade deficit in agricultural products between the United Kingdom and the rest of the Common Market about £5,000 million? Does not it demonstrate that, for the United Kingdom, the CAP has been a ghastly and costly failure? That is especially so in view of the fact that, since 1979, the Government have contributed about £14,000 million under the CAP. Does not this demonstrate the need for reform of the CAP as a matter of drastic urgency and will the Government do something about that? Secondly, could not British farmers contribute more to the production of the nation's food?

Mr. Gummer: The hon. Gentleman has got his facts the wrong way round. The common agricultural policy has enabled us to produce a great deal more of the food that we need. However, the consumers of Britain want choice. The hon. Gentleman said that the balance of trade deficit in agricultural products is £5,000 million, but the foods that that figure covers include many that cannot be produced in this country. However, there is £2,500 million worth of food that we could produce. I do not recommend that people buy British when British is not best, but I believe that farmers, other producers, manufacturers and retailers could do a great deal more to use home sources, so long as they produce food that the public want. It is for the consumer to decide; we have to meet his demand.

Agricultural Tenancy Law

Mr. Colvin: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the response to his consultation paper on the reform of agricultural tenancy law.

Mr. Gummer: The closing date for responses to the consultation exercise is 13 May. Early indications are of widespread acceptance of the need for change, but, quite properly, the various interests are taking time to prepare their considered responses. All comments will be weighed very carefully by my right hon. Friend the Secretary of State for Wales and myself before any decisions are made.

Mr. Colvin: Does my right hon. Friend acknowledge the serious decline in the agricultural rented sector since the end of the second world war? Does he agree that it would be in the best interests of British agriculture if that trend were reversed? Will he ensure that any new agricultural tenancy legislation will be positive enough to encourage the industry to be dynamic and flexible, so that it may be able to compete in the 1990s? Does he agree that freedom within contract might be the best basis of any new legislation?

Mr. Gummer: My hon. Friend is perfectly right. The tenanted sector is indeed in decline. We want to improve the opportunities for new entrants to the farming industry. The only way to achieve that is to ensure that more land is available. That is why I have made some radical propositions for change in the landlord and tenant scheme. I am pleased that there is widespread acceptance of both the need for more land and the need for radical change.

Farm Gate Prices

Mr. Hague: To ask the Minister of Agriculture, Fisheries and Food by how much farm gate prices have increased since 1979 relative to the retail prices index.

Mr. Curry: The index of producer prices of agricultural products increased at an average annual rate of 3·6 per cent. between 1979 and 1990 compared with 7·5 per cent. for all items in the retail prices index.

Mr. Hague: Does my hon. Friend agree that that shows that the British farmer has given tremendous value for money to the consumer in the past 12 years? Does he further agree that if every other industry in Britain had achieved efficiency and productivity improvements comparable with British agriculture during the same period, we should be one of the richest nations on earth?

Mr. Curry: I absolutely agree with my hon. Friend The farmers of Richmond, Skipton and Ripon are in the forefront of the achievement of which my hon. Friend speaks.

Bovine Spongiform Encephalopathy

Mr. Andrew Smith: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the incidence of bovine spongiform encephalopathy in the United Kingdom.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. David Maclean): The incidence of confirmed cases of BSE over the past 12 months is 3·9 cases per thousand of the total adult cattle population in Great Britain and 0·24 cases per thousand of the adult cattle population in Northern Ireland.

Mr. Smith: Will the Minister confirm that the Government's advisory committee on BSE was forecasting a monthly incidence of 350 to 400 cases? Does he share my concern that the actual incidence for February was more than 1,500 cases? How does the Minister explain the actual incidence so greatly exceeding the estimate? What does he intend to do about that? In the interests of farmers, consumers and animals, will he now review his decision to close a number of veterinary inspection centres?

Mr. Maclean: All the safety measures are in place to protect the public and that is our prime concern. Independent experts are constantly reviewing the safety precautions that we have taken. As for the number of BSE cases, if the hon. Gentleman studies the figures and graphs that we produce on a weekly basis, he will see that the predicted pattern usually rises in February and March every year and declines during the rest of the year. This year is no exception. The BSE incidence is following the pattern of previous years.

Food and Drink (Exports)

Mr. Wareing: To ask the Minister of Agriculture, Fisheries and Food what plans he has to boost British exports of food and drink.

Mr. Gummer: The Government are firmly committed to supporting Food From Britain in its efforts to encourage exports of British food and drink.

Mr. Wareing: Is the Minister aware that the £5·1 million deficit on food and drink was the biggest of any sector in this country's trade deficit for last year? Is he further aware that half that deficit was with countries with no particular climatic advantage over Britain, such as Germany, France, the Netherlands and Belgium? Will he acknowledge that in those countries, seven times as much money is provided for the budgets of bodies such as our Food From Britain to enhance the export and sale of food and drink? Will the right hon. Gentleman pull his finger out and do something to ensure that Food From Britain has an adequate budget relative to our economic needs?

Mr. Gummer: The hon. Gentleman should realise that much of that money comes from the industry. He asks me to pull my finger out, but I urge him to remind the House that the Labour party's Front-Bench spokesman on agriculture has told people that he does not eat British sausages and will not eat English apples. While the Labour party undermines products from this country and casts aspertions on the safety of British food, the hon. Gentleman is in no position to tell me how to deal with Food From Britain.

Mr. Bill Walker: My right hon. Friend will be aware that the raspberry is a most pleasant fruit and that over 80 per cent. of the raspberries grown commercially in the United Kingdom, and in Europe, are grown in Tayside. Is he aware that this marvellous export—the raspberry—is at risk because the European Community is allowing dumping from eastern Europe?

Mr. Gummer: I have been fighting to protect the British raspberry not just to help my hon. Friend's constituency but because I am particularly fond of raspberries. I give my hon. Friend the assurance that the Government support British products and believe that British raspberries are the best that one could have. I hope that the same support for British products will come from the Labour party, which is constantly undermining our producers.

Butter and Meat

Mr. Madden: To ask the Minister of Agriculture, Fisheries and Food what improvements he plans to the scheme to distribute butter and meat.

Mr. Curry: This year I intend to give preference to organisations capable of distributing products widely throughout their community and to groups of smaller organisations co-operating in the same locality.

Mr. Madden: Will the Minister admit that his organisation of the scheme has been the target for widespread criticism? As organisations have to receive a minimum of 1 tonne of butter or meat, may I ask him to do everything possible to help with transport costs? Will he ensure that the butter and meat are available to the largest number of people, including all pensioners and not just those on income support?

Mr. Curry: No, I will not. It would be ridiculous to try to distribute the food to all old-age pensioners. I can think of some old-age pensioners in the House who have no need of hand-outs from the taxpayer. It is much better for the food to be directed to the homeless, the destitute, those on income support, those on family credit and those living in hostels, as was intended. That is a much better solution to a rather bad scheme.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Eastham: To ask the Prime Minister if he will list his official engagements for Thursday 21 March.

The Prime Minister (Mr. John Major): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I will be having further meetings later today.

Mr. Eastham: Noting that unemployment has gone up by more than 300,000 in 10 months, to the highest rate in any EC country, may I ask why we have the second deepest recession in 10 years when we have our own coal, our own natural gas and our own North sea oil bringing in £90 billion? The CBI is telling us that by the end of the year 2·25 million people will be unemployed and that unemployment will increase further next year. What is the Prime Minister's excuse for that?

The Prime Minister: The hon. Gentleman will also have seen the very strong welcome from the CBI for the measures in the Budget that will help the cash flow and reduce the taxation of businesses. He will also be aware of the unprecedented amount of help available for people who are unemployed. We have geared that particularly to the areas where unemployment is most severe.

Sir Timothy Raison: Will my right hon. Friend consider the grave famine that is developing in Africa? Will he make sure that we and the European Community deliver quickly as much aid as possible?

The Prime Minister: My right hon. Friend the Minister for Overseas Development is studying precisely that matter at the moment.

Mr. Kinnock: Does the Prime Minister agree that Question Time is an appropriate moment for him to apologise to taxpayers for the £14·3 billion that his Government have wasted on the poll tax fiasco?

The Prime Minister: The right hon. Gentleman should explain his phoney figures, for he will know that included


in his figure is £3 billion for non-payment created partly by his own side urging people not to pay and that the vast majority of the remainder is money that is available to provide extra money for local services. Would he remove that extra money for local services?

Mr. Kinnock: It was the Prime Minister who described the poll tax as uncollectable when he spoke to his hon. Friends earlier this week. After wasting all that money, why is he not big enough simply to say sorry?

The Prime Minister: The right hon. Gentleman did not listen. The money that he has counted as wasted is money that will be available for local services. If the right hon. Gentleman thinks that money is wasted on local services he should make it clear.

Mr. Batiste: Will my right hon. Friend try to find time to reschedule his visit to the Vickers tank factory in Leeds which he had to cancel a few weeks ago due to bad weather? Is he aware that many people there would like to hear from him, following his visit to the Gulf, how the Challenger tank performed and would like to express to him the urgent need for the Government to come to a decision on the replacement contract for the Chieftain tank?

The Prime Minister: I was certainly sorry—[Interruption.]—that I was unable to make that particular visit. [Interruption.] I am always happy to spread a little amity in the Chamber, so I repeat to my hon. Friend that I am sorry that I was unable to visit the factory, when I would have been able to tell the workers that the Challenger tank performed absolutely magnificently in the Gulf—far above the expectations that anyone could have had of it. I hope that we shall soon be able to draw all the lessons that we need from that and make a decision on Challenger 2.

Mr. Sillars: To ask the Prime Minister if he will list his official engagements for Thursday 21 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Sillars: Is the Prime Minister aware that the toast in Scotland tonight will be to absent enemies—Thatcher and the poll tax—[Interruption.]

Mr. Speaker: Order. We use the constituency name here.

Mr. Sillars: It will not really matter in Scotland, Mr. Speaker.

Mr. Speaker: But it does here.

Mr. Sillars: I am talking about the right hon. Member for Finchley (Mrs. Thatcher) and the poll tax. When will the Prime Minister acknowledge his personal political debt to the non-payers who destroyed the poll tax by making it uncollectable? If we had not done so, it would still be here, she would still be here and he would not be the Prime Minister.

The Prime Minister: In what he has just said the hon. Gentleman makes clear precisely why his party is so unattractive and undesirable. I am sure that his remarks are not remotely the feelings of the people of Scotland.

Mr. Tracey: Will my right hon. Friend sympathise with the disgust of the great majority of the British public at those people who have not paid their share towards local government finance? Will he give an undertaking that people who have not paid their community charge will be pursued?

The Prime Minister: I certainly will. My hon. Friend might share my view that the disgust is redoubled at those people in elected positions who have perhaps persuaded people not to pay.

Mr. Kennedy: To ask the Prime Minister if he will list his official engagements for Thursday 21 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Kennedy: As regards the scheme for a reduction in overall poll tax figures, announced by the Chancellor in the Budget statement this week which has become known, I gather, as the Ribble Valley rebate, will the Prime Minister explain why those who will benefit most are those best able to pay and why the people who are still on rebates in the lowest category of income, by the Government's definition, will not enjoy the same degree of reduction from the real poll tax figure which they have to pay? Can that possibly be just?

The Prime Minister: I would not have expected such a stupid question from the hon. Gentleman. Even he should recognise that one cannot give a rebate to people who are not expected to pay in the first place.

Mr. Burt: Should not the real apologies in local government come from the spendthrift Labour councils which have broken ceiling after ceiling and from the Opposition Front-Bench spokesmen who still refuse to spell out their proposals to control local authority finance?

The Prime Minister: Of course, they will not spell out their proposals. They do not know what they are. They are still dithering.

Mr. Lofthouse: To ask the Prime Minister if he will list his official engagements for Thursday 21 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Lofthouse: Does the Prime Minister recall that on nine occasions he supported the poll tax legislation through the House and cast his vote accordingly? Does he now regret that? If he had his time again, would he give such strong personal support to that legislation?

The Prime Minister: I indicated clearly throughout the debates on the community charge that I thought that the principle was correct. The hon. Gentleman will know our new proposals in a matter of moments and he might reserve judgment until then.

Mr. Lester: Does my right hon. Friend agree that, far from what Opposition Members say, the greatest contribution that this place makes to society is that we all believe in the rule of law and in the ways in which one can change laws within the democratic framework, not by protesting or refusing to pay the poll tax?

The Prime Minister: I agree with the principle of what my hon. Friend said. However, I think that he was being over-generous when he said that everyone in the House believes that. Clearly, some Opposition Members do not.

Mr. Alan W. Williams: To ask the Prime Minister if he will list his official engagements for Thursday 21 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Williams: Does the Prime Minister recall that in the 1989 autumn statement he predicted that inflation would be down to 5·5 per cent. at the end of last year and that he revised that figure to 7·25 per cent. in the last Budget? In fact, it turned out to be over 10 per cent. What credibility should we give the Chancellor's forecast that inflation will fall to 4 per cent. by the end of the year when the rise in average earnings is 9 per cent., electricity prices are to go up by 13 per cent., water charges are to go up by 16 per cent. and petrol will rise by 20p a gallon?

The Prime Minister: The hon. Gentleman is accurate in saying that inflation is currently higher than I expected it to be. However, he will also know that it is not just my right hon. Friend the Chancellor's forecast that inflation is falling dramatically. That forecast is shared by almost every independent forecaster and I think that the hon. Gentleman will see the accuracy of it in the months to come.

Mr. Bellingham: To ask the Prime Minister if he will list his official engagements for Thursday 21 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Bellingham: Will my right hon. Friend find time today to consider the part played by small firms in turning west Norfolk into an economic success story? Is he aware that during the past few weeks they have lobbied hard for various Budget measures? Does my right hon. Friend agree that the Chancellor listened to them and that Tuesday's Budget was an outstanding Budget for small businesses?

The Prime Minister: It certainly was an outstanding Budget for small businesses and my hon. Friend, who has a long-standing interest in them, is in a good position to judge that. His view was reflected by the National Federation of Self Employed and Small Businesses, which described my right hon. Friend's Budget as
one to bring a smile to small businesses.
That is the clearest possible illustration of the way in which small businesses have accepted the Budget.

The Gulf

Mr. Corbyn: To ask the Prime Minister what further plans he has to visit the Gulf region.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Corbyn: That is rather strange since the question was about the Gulf.

The Prime Minister: I have no immediate plans to do so—[Interruption.]

Mr. Speaker: Order.

Mr. Corbyn: I am quite good at lip-reading and I assume that the Prime Minister said that he was not preparing to go to the Gulf region again. I put it to you, Mr. Speaker, that the Prime Minister should visit the Gulf region and assess the results of the war. There were 150,000 casualties and deaths, there is martial law in Kuwait and environmental destruction throughout the region. It is the product of arms sales. Does the Prime Minister consider that all the money that has been spent by the Government on the Gulf war compares unfavourably with the miserly figure of £28 million spent on the African famine? Should not the right hon. Gentleman now create peace in the Gulf and give resources to solve the African famine?

The Prime Minister: The hon. Gentleman in his litany missed out one or two material facts—the liberation of Kuwait for a start. He also missed out the fact that the Iraqis were murdering Kuwaitis, dismantling Kuwait, damaging the environment and committing unpardonable sins. I very much regret that the hon. Gentleman does not recall that.

Engagements

Mr. Carrington: To ask the Prime Minister if he will list his official engagements for Thursday 21 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Carrington: The proposal in the Budget to establish high street share shops is greatly welcomed by all of us who want shares in public companies to be more widely held by the public at large. Will my right hon. Friend confirm that high street share shops must conform to all the provisions of the Financial Services Act?

The Prime Minister: I confirm that to my hon. Friend. The proposed high street share shops will be subject to the Financial Services Act. That will certainly be made clear and I very much hope that this new way of distributing shares will be successful.

Local Government Review (England)

The Secretary of State for the Environment (Mr. Michael Heseltine): With permission, Mr. Speaker, I wish to make a statement outlining progress on the review of local government—[Interruption.]

Mr. Speaker: Order. The whole House, and the country, too, have been waiting for this statement.

Mr. Heseltine: The House will remember that when I announced the review on 5 December I explained the comprehensive nature of our review. For the first time we are looking at the structure, functions and finance of local government in the round.
I should like to thank the very large number of people and organisations who have put forward their views. I do not need to tell the House that they have not always been compatible one with another.
We took as our starting point our firm belief that the local delivery of certain services—many of them essential—is a central feature of a pluralist society. Local government must enable local people to exercise continuing influence over the quality and the range of the services which Parliament entrusts to them.
Local government is responsible for the efficient delivery of these services. We need responsible, elected local authorities, not only to provide a check and a balance to Westminster, but also to reflect the multiplicity of aspirations amongst local communities.
But, given the primary responsibilities of central Government, local government cannot be a fully independent power in the land. It traditionally derives its power from Parliament, and it must complement and not compete with central Government in its activities.
Within this framework, we believe that councils should be accountable for their actions and that there should be a direct and visible relationship between the costs of services and the local bills to which they give rise. We believe that those bills should be spread widely and fairly throughout communities; that they should bear some relation to people's ability to pay; and that it should be possible to levy and collect them without difficulty.
These principles are guiding our review. I am able to announce today some interim conclusions and, in other areas, to narrow the options so as to proceed to more detailed consultations.
Many parts of England now have, in effect, unitary local government. The Greater London council and the metropolitan county councils were abolished in 1986. The Inner London education authority went in 1990. There is little demand for their restoration. Indeed, it is difficult now to perceive any real role that they played.
Outside the main conurbations, leaving aside the valuable rolë played by parishes, the system of two principal tiers is being questioned. Also being questioned is the continued existence of certain of the authorities which were created by the local government reorganisation of 1974, but which have not succeeded in inspiring local loyalty. Another challenge is that the role of authorities is changing as they increasingly become enablers rather than direct providers of services.
There is, therefore, now an opportunity to think afresh about the structure of local authorities. But the Government do not see this as an opportunity to impose

a new pattern of local authorities according to a national prescription. Nor do we believe that it is necessary to have a uniform pattern of authorities in every part of the country. Local people should have an important role in determining what structure of local government best reflects their community loyalties. That does not mean, therefore, the wholesale abolition of either county councils or district councils, nor even unitary authorities everywhere. It means arriving at the right solution for each community. We intend to adopt a practical approach in response to local views and local conditions, but it seems likely that we shall move to a larger number of unitary authorities.
We shall, therefore, consult on the proposition that a local government commission shall be charged with responsibility for evaluating the most appropriate form of local government for individual areas, taking account of the wishes of local people and putting forward proposals for reform. We will proceed area by area.
The reduction in the local tax burden and the correspondingly larger contribution from central taxation announced in my right hon. Friend's Budget statement imply a need to consider whether a number of functions should now be brought into or financed directly by central Government. That would be without further changes to the balance between central and local taxation.
My right hon. and learned Friend the Secretary of State for Education and Science is bringing forward today proposals for such a transfer in one area of his responsibility.
The issue of how local authorities are managed is no less crucial. The problems that local authorities face are compounded by the cumbersome internal arrangements for the management of councils. The committee system—which dates back to the Municipal Corporations Act of 1835—requires that all decisions are taken collectively by large numbers of councillors, in full council or committees. Too many councillors spend too much time achieving too little.
Consequently, it is difficult for local government to attract and keep enough men and women of the right calibre both to lead what are now multi-million pound organisations providing a range of key services and to represent properly the interests of the people who elected them. We believe, therefore, that there should be a new look at the internal workings of local authorities to improve the decision-making process. I shall issue a consultation paper on these issues.
Alongside that, we also want to develop further the idea of the enabling council. Many of the Government's policies have been designed to move power to individual members of the community—in particular, the right to buy, the tenants' charter and local management of schools. Compulsory competitive tendering has also been part of that process and we will be looking at ways to make it more effective and to carry it forward. In particular, we will be looking at new areas where contracting out should be applied. Those will include professional and technical tasks, as well as manual tasks. Housing management, legal services and computer services could all be added to the list. The success of a local authority must be measured not by its size, but by the quality of the services delivered, from whatever source, by its responsiveness to its clients and customers and by the value that it squeezes out of each pound of taxpayers' money.
I now turn to the question of finance. A local tax base is essential if there is to be any meaning to the concept of local government. But local government services cost a great deal of money—more than £50 billion in the corning year—and the burden on local taxpayers has become too great. We have therefore decided to make a fundamental shift in the amounts which central and local taxpayers pay towards the cost of local government services. This change will take effect in 1991–92, and will reduce local taxation to a level that should be sustainable in the longer term.
The first consequence of this was announced by my right hon. Friend the Chancellor of the Exchequer on Tuesday. We have concluded that it is right to reduce the present average headline community charge of £392 in England for 1991–92 by £140 to £252. The average amount payable by charge payers, after allowing for the community charge reduction scheme and benefits, will then be considerably less than this. To secure this, my right hon. Friend is providing a further £4¼billion from national taxation to local authorities.
As a result, in 1991–92, the community charge will be raising less than rates in their last full year. For the coming year, locally raised finance will fund 22 per cent. of local government expenditure, compared to 34 per cent. this year. And these figures are before the substantial benefit of rebates and the community charge reduction scheme.
To achieve these objectives, my right hon. Friends the Secretaries of State for Scotland and Wales and I are today introducing in the House a short Bill. If enacted, this will have broadly three effects.
First, it will provide that the community charges which authorities have set for 1991–92 are replaced the day after the Bill's enactment by new charges £140 lower. Councils will not need to meet to set the new charges, but they will be treated in all respects as if they were set by authorities in the usual way.
Secondly, my right hon. Friends and I will be empowered to pay grants to charging authorities to make up the loss of income resulting from the reduction in charges brought about by the Bill's provisions. It is also our intention to pay grant to cover authorities' additional administrative expenses arising as a consequence of the Bill.
All this means that where authorities have already issued their charge bills for 1991–92—I know that some authorities have done so—they will, after the Bill's enactment, need to issue fresh bills reflecting their new lower charges. We propose to amend the regulations on the community charge demand notice slightly to provide the basis for the new bills but we believe not in ways that would result in significant changes to authorities' computing arrangements. We are revising the profile of payments from the non-domestic rates pool to ensure that our proposals have no significant effect on authorities' cash flow.
These proposals do not affect the operation of the community charge reduction scheme or community charge benefits, though it will, of course, be necessary to recalculate entitlements under both schemes.
My Department has written to local authorities, and to the local authority associations, explaining the details of all these arrangements. Clearly, it is desirable that the new charges should be in place at the earliest opportunity. Accordingly, we shall be looking to Parliament to consider the Bill as a matter of urgency.
Having reduced community charges to reasonable levels, we shall expect local authorities to restrain their spending to keep them at those levels. I shall therefore be prepared to use my capping powers rigorously again in 1992–93.
Having achieved a reasonable balance between funding from national sources and funding from local tax, we need to address the question of the local tax itself. I referred briefly in my opening remarks to the principles which I believe should underpin any form of local tax. Let me spell them out.
First, accountability. As far as possible, a local tax should buttress the accountability of a local council to its taxpayers. People should be able to see some link between what they are being asked to pay and what their council is spending.
Second, fairness. Nobody likes paying taxes. But in our society taxes have to be basically acceptable to taxpayers; and to achieve that they must be perceived to be fair.
Third, ease of collection. Any tax will require administrative arrangements to collect the revenue, including measures to chase up those who are late in paying. But if the tax is too difficult to collect, the costs of collection become unacceptable.
Fourth, most people should make some contribution. We believe that it is right that, as far as possible, any tax should take some account of the number of adults in each household so that they contribute to the cost of services provided by the local councils which they elect. This principle has gained a wide measure of acceptance.
Fifth, restraint. No tax is acceptable if it is levied at penal rates either as a result of local authority overspending or because the burden on any individual or household is excessively high. We are adamantly opposed to excessively high bills for a minority of electors—a feature of the old rates system.
In accordance with these criteria, we have reached our conclusions about the future of the community charge. In spite of the comprehensive system of income-related rebates, and the reduction scheme that we devised, the public have not been persuaded that the charge is fair. We have therefore decided that from the earliest possible moment the community charge will be replaced by a new system of local taxation.
After a careful reappraisal of the options, we have decided in principle to bring forward a new local tax under which there will be a single bill for each household comprising two essential elements, the number of adults living there and the value of the property. There are a number of ways of assessing values, on a capital or a rental basis, which require careful evaluation and extensive discussion and consultation. But it is our intention that the system that we introduce should have the following features: it should reflect people's concern that the system is fair; the balance of funding as between central taxes and the new local tax should be broadly in line with that announced by my right hon. Friend the Chancellor of the Exchequer on Tuesday; it will be essential to ensure that local taxpayers do not face undue changes in their bills as a result of the introduction of the new local tax arrangements: there will therefore, need to be arrangements to protect them during the transition to the new system; the system should ensure that regional variations in property values do not lead to disproportionate bills in high price areas; there should be rebate arrangements to protect people on low incomes from making a


disproportionate contribution to local taxation; there must also be restraints to ensure that local taxpayers do not face excessive bills as a result of overspending by local councils, either before or after the introduction of the new system: there are a number of ways, including capping, by which this may be achieved.
I made clear at the beginning of this statement my commitment to the institution of local government. But, for its part, local government must recognise economic reality and the duty and responsibility of central Government to manage the economy. Central Government also have a duty to protect local taxpayers from excessive bills.
I intend to publish a consultative document after the Easter recess setting out alternative approaches and dealing with these issues. At present, the Government have no intention to propose changes to the uniform business rate. My right hon. Friends the Secretaries of State for Scotland and for Wales will be making separate statements about the outcome of the review as it relates to those countries.
Let me summarise. We have already dealt with the burden of the local tax. I shall shortly publish consultation papers on structure, internal management and the new local tax. We will conclude the period of consultation in the summer. Depending on the outcome of that consultation, we intend to introduce legislation setting up the local government commission and providing for the new local tax in the next Session of Parliament. We anticipate that the first of the new authorities could be in place by April 1994. We shall consult local authorities on the basis that the new tax could be in place in 1993–94.
The proposals that I have outlined will establish a system of local government which will carry through into the next century. These proposals are designed to end the sterile quarrel between supporters of central and local government. They should attract men and women of sufficient quality and commitment to restore authority to and confidence in local government. They should enhance the quality of services and give extra momentum to the pursuit of value for money. They should result in a local government which puts people first. I commend the proposals to the House.

Mr. Bryan Gould: We have just heard the most complete capitulation, the most startling U-turn and the most shameless abandonment of consistency and principle in modern political history. The former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher), who cannot bear to be present, was famously not for turning. The Secretary of State and his new Prime Minister have not only turned; they have been through a revolving door. May we be assured that the new Prime Minister will not complain tomorrow that he has once again been bounced by this latest leak by the Secretary of State of his own proposals?
We have not heard from the Secretary of State a single word of contrition or apology. Will he now make a formal apology to the people of Britain for 12 years of arrogance, to local government for unprecedented chaos, and to millions of people who have been driven to despair by shattered services and unfair and ever rising bills? Is it not

astonishing incompetence that, after 12 years in office and £13·5 billion of taxpayers' money, the Secretary of State still cannot tell us what he intends to do?
What happened to the Prime Minister's assurances on Tuesday that we would have all the answers this week? How could a Prime Minister on top of his job make promises on Tuesday which his Secretary of State is unable to fulfil on Thursday? Why are we left not with the answers but with the questions? Why have we not had answers to the most obvious questions? When will the charge take effect, what will be the valuation rate, how many people will be assumed to constitute a household, what will be the size of the poll tax element, and how many people will be losers?
Is not the problem that, while the Secretary of State clearly concedes that the poll tax flagship has been holed beneath the waterline, the wreck is still afloat and is a danger to all shipping? What the Secretary of State told us today, with its continued uncertainty and confusion, its inevitable doubts and delays, is in effect that the poll tax bills will keep on coming—this year, next year, in 1993 and in all probability in 1994 as well. Why will not he accept our offers of co-operation on a Bill to abolish the poll tax, on the basis of our fair rates proposals—the only way in which we can ensure that this year's poll tax bills will be the last?
Is it not clear that under the Secretary of State's proposals the poll tax will still be with us even after 1994? This is the tax that refuses to lie down and die. Under those proposals, will not people continue to be taxed simply because they live and breath? Are we not still faced with a head tax, with all the problems of a register, with all the unfairness of a flat rate tax, and with all the difficulties of extricating money from people with no income? Does not the right hon. Gentleman recognise that he cannot rely on the electoral register to solve his problems without putting a price tax on the right to vote and then inviting people to sell that vote at a price which may be as much as £150 or £200 per vote? Are we not left with all the objectionable features of the poll tax but with all the difficult and transitional problems of a new and untried property tax? Are we not faced with a pig-in-a-poke tax, a bed-and-breakfast tax, a property poll tax, a tax on the roof over one's head and a tax on the heads under one's roof?
How can the Secretary of State be confident of persuading his own party to support these proposals in the Division Lobbies? Does he recall the right hon. Member for Finchley assuring the country that she would never introduce a property tax? Does he expect her to follow him through the Lobbies? And what of himself and all his Front Bench colleagues—indeed, of the whole Tory party, all of whose members fought the last election on a manifesto commitment to abandon property taxes? Are they now to be whipped through the Lobbies—and how many of them will refuse to follow?
Are not the right hon. Gentleman's proposals for reorganising local government, vague as they are, also driven by the poll tax? Should not structure determine finance rather than the other way round? Why is the poll tax still in the driving seat, spreading its malign influence not just through education and through the whole of the Budget strategy but into the whole structure of local government, too? Are not this a Government who, despite their belated confession of terrible error, are still in thrall to the monster that they created?
There is, after all, some justice in the spectacle of the Government continuing to pay a heavy price for their poll tax debacle. The tragedy is that the rest of the country will also continue to pay that price—the price of a mistake borne of arrogance and perpetuated by a leaking and limping Government who, on the evidence of this broken-backed and blood-stained statement, are too weak and divided to correct their own error.

Mr. Heseltine: It will be apparent to the whole House that we have achieved more in three months than the Opposition achieved in 11 years. I repeat, for the benefit of the hon. Member for Dagenham (Mr. Gould) who obviously did not hear what I said, that we shall consult on the basis that the new local tax will be in place for the year beginning 1993.
Let me return to the spirit with which we began this review a few months ago. The hon. Gentleman has criticised our proposals. I will make him an offer: I would be very happy to include his proposals in the consultative process that we are about to begin—[Interruption.]

Mr. Speaker: Order. We have a very heavy day ahead of us.

Hon. Members: Labour party Members are leaving.

Mr. Heseltine: I am not quite sure who is deserting the sinking ship, but I should like to help the hon. Gentleman a little more.
To conduct that consultative process with the thoroughness that the hon. Member for Dagenham would want, I need to know answers to some questions about the costs of the fair rate proposals. The House knows that, in the past few days, we have put £4¼ billion into switching the incidence of responsibility from local people to the centre. The Labour party said that it would not have increased VAT to do that. What would it have increased? I need to know the answer so that I may consult thoroughly. If people need to know exactly who will pay how much, which is the complaint of the hon. Member for Dagenham, he must say precisely where he wants the tax burdens to fall. When the Labour party has worked out the answers to those questions, we shall have already won the next general election.

Mr. Bob Dunn: If there are any apologies to be made in the House today, they should be made by the Labour party, which allows law breakers to sit on its Benches.
Will my right hon. Friend the Secretary of State be a little more precise about the equalisation arrangement to reflect property values between the north and south. and within the regions?

Mr. Heseltine: I am grateful to my hon. Friend. Obviously, we must address the equalisation problem in the consultative document. It is not possible to do so in general terms, but we must weigh up the various elements of the local tax before making a judgment. Some remarkable figures have been quoted as the likely consequence of our proposals for people living in the south-east, but they bear no relationship to reality.
On my hon. Friend's first point about the discrediting of local government, it is impossible to overstate the damage that has been done to the institution of local government by the behaviour of many Labour-run local councils.

Mr. A. J. Beith: Why has the Secretary of State chosen to move from the most unpopular local tax ever to the second most unpopular local tax ever? He has gone straight from the frying pan into the fire. We have not learned much about the new tax this afternoon, except that it will not be based on people's ability to pay, which is the clear characteristic of a local income tax.
Will the Secretary of State accept our welcome for the fact that his proposals on structure follow closely—even, in places, word for word—our proposals? Why does not he accept our whole package and recognise that fair elections for local councils, together with a fair tax, could make local government responsible and genuinely local?

Mr. Heseltine: I very much appreciate the conversations that we conducted with the Liberal party. They were in marked contrast to the wholly irresponsible position of the Labour party, which so lacked confidence in its proposals that it would not even discuss them.
We started our review in the hope that we could find a measure of agreement on the various aspects of local goverment. We have been able to meet with the Liberal party on some of the approaches that we have adopted and I have no ground for complaint about that.
The hon. Gentleman asked why we did not pursue the option of a local income tax as advocated by the Liberal party. There were several reasons, one of which was that the mood of the country means that it would not be inclined to want to entrust its income tax rates to local Labour-controlled authorities. Having listened to the hon. Gentleman at great length and with courtesy, I was persuaded not to follow his arguments, but to reject them.

Mr. Nicholas Ridley: I support much of what my right hon. Friend the Secretary of State said in the first part of his statement. However, now that my right hon. Friend the Chancellor of the Exchequer has made a huge sum of money available to reduce the community charge, if my right hon. Friend the Secretary of State had put that money into improving the rebate system rather than reducing the total, might not the community charge have become acceptable in two years' time? The fact that my right hon. Friend has suggested a two-tax system that will be just as hard to collect as the present one, will not be related to ability to pay and will create a new class of losers might be simply because he decided to make his statement on the Ides of March.

Mr. Heseltine: As my right hon. Friend rises behind me, I do not think that anyone would suggest that he has a lean and hungry look. I very much welcome his support for the first part of my statement. To receive any agreement or support at all when dealing with the reorganisation and reform of local government is something of an achievement, so I am grateful to my right hon. Friend.
My right hon. Friend suggests that we should have taken the hypothetical concept of allowing the community charge to run on, perhaps spending more and more money and underpinning it with more and more social security arrangements. That is not a credible basis on which to sustain a tax. First, the tax is widely perceived as not being as fair as was originally intended and hoped. Secondly, there are undoubtedly collection difficulties because of the significant number of changes during the course of a given year. Therefore, introducing a new, local tax that


combines many of the elements of my right hon. Friend's ideas but also holds out greater certainty of collecting most of the money moves us towards an important consensus.

Mr. John Garrett: Is it proposed that the Government would give evidence, or make recommendations, to the local government commission stating which local authorities they would prefer not to continue?

Mr. Heseltine: It is unrealistic to think that the Government will not have an input into the analysis of something of this sort. I cannot think of any reorganisation of local boundaries in which, in the end, Ministers of the Crown are not involved. Everybody should have a wide chance to contribute to such matters. The hon. Gentleman should bear with me until he is able to read the details of the proposals and the consultative documents. In drawing them up, I shall do my best to listen to points put to me from all parts of the House.

Miss Emma Nicholson: Does the Secretary of State agree with me that the Cassius's in this place sit on the Opposition Benches and that their skill lies in leading the electorate to their death? The answer proposed by the hon. Member for Dagenham (Mr. Gould), when he was invited just now by my right hon. Friend to consult again, was a helpless response—"Abolish the poll tax, abolish the poll tax." He had no constructive proposals to offer the British electorate or the Government. I congratulate the Secretary of State on retaining the key element of the community charge, accountability to the local electorate, while bringing in the greater concept of a household service charge.

Mr. Heseltine: I am extremely grateful to my hon. Friend for her constructive support. Nothing that we have heard from the hon. Member for Dagenham (Mr. Gould) today can in any way be described as an answer.

Mr. Stanley Orme: What will be the costs of collection for the new poll tax—because that is what it is? Will there still be a poll tax register, with people being forced to register as they are at present? Will not the costs be increased? Is this not the poll tax under another name?

Mr. Heseltine: I can understand the dismay of the Labour party and its attempts to suggest that this is a poll tax, but it is not. It is a local tax which is quite different in its concept and application. It is perfectly possible that we shall not need a register to administer the tax. But all those matters need detailed consultation with the local authority associations. I am absolutely amazed that, every time I suggest discussing the detail with anyone, the only party that goes through the roof with indignation is the one that does not believe in consultation and wants to impose its own wholly unacceptable views on everyone in sight.

Mr. Cranley Onslow: May I congratulate my right hon. Friend and his colleagues on producing a system that will preserve the principle that every adult should contribute to the cost of local government, that will take account of people's capacity to pay, that will ensure collection—even from the most notorious evaders on the Opposition Benches—and that will, above all, keep down the cost of good Conservative local government?

Mr. Heseltine: My right hon. Friend is as aware as I am that, on average, a vote for the Labour party puts £50 on the community charge. I welcome his support. We shall ensure that our proposals progress with the greatest dispatch.

Mr. William Ross: As VAT was increased by 2·5 per cent. on Tuesday, may we assume that the extra income will be allocated specifically to local government or to its particular functions? Will he confirm that each elector or ratepayer in Northern Ireland will benefit by £140?

Mr. Heseltine: I pay tribute to the hon. Gentleman for the courteous and helpful discussion that I had with him. He has made an important point. This was not an hypothecated revenue that the Chancellor described when increasing VAT by 2·5 per cent. The important point that my right hon. Friend made was that he was broadly creating a new balance between revenue raised from local sources and revenue from the central Exchequer. The single biggest change for which he was responsible was in the balance between the very substantial amount funded from the centre and the amount that will increasingly be funded by the local ratepayer or charge payer. We have begun to reverse the process that began in 1976.

The right hon.: Member for Bethnal Green and Stepney (Mr. Shore), who I am glad to see in his place, began the process of increasing the amount paid locally when he reduced central Government support. That reduction continued between 1976 and 1979 until my right hon. Friend the Chancellor brought about a significant shift.
On the specific question about Northern Ireland—it is important to shed light on the darkness of Opposition Members, even though it means a slight digression—these are matters for my right hon. Friend the Secretary of State for Northern Ireland, but the same proportions will apply in Northern Ireland.

Sir Hugh Rossi: I welcome the principles enunciated by my right hon. Friend as underlying the new form of local tax that the Government propose, and I recognise that much will depend on the balance achieved in the application of those differing principles, but I urge him to bear well in mind that what counts most in an area such as my constituency is the total demanded of residents by the local authority and the services provided in return for those moneys. Will he ensure that under the new system and structure of local government provision is made to regulate local authorities and greater power is given to the independent Audit Commission to ensure that real value for money is given?

Mr. Heseltine: I very much welcome my hon. Friend's question. We are aware that the issue is one of detail when it comes to the introduction of the specifics of the tax. It is important to issue a consultation document so that local authorities, which must administer the tax, can participate in how it develops. We shall bear that carefully in mind. All right hon. and hon. Members will have a chance to consider the issues in principle before we draft legislation. I thoroughly agree with my hon. Friend that, in many aspects of local government, the pursuit of value for money has not been taken sufficiently seriously. Our proposals will provide us with an opportunity to do so.

Mr. Merlyn Rees: In the midst of all the "interim", "in the future" and "after


consulting" proposals that the Secretary of State made, there was the certain statement that we would be paying the poll tax in the 1992 financial year. The right hon. Gentleman says, "We do not know what the figures are." Will he tell me the figures so that when I return to Leeds at the weekend I can tell people what the average three-bedroom house with two residents will pay after 1 April next year?

Mr. Heseltine: I have been as fair to the Labour party as I can be. Can the right hon. Gentleman conceivably answer that question in terms of the fair rates policy of the Labour party? Would it not be easier for him, in giving fair and dispassionate advice to his constituents, if he could compare our proposals with those of his party? am offering the Labour party the chance to do that.
Because of the switch that my right hon. Friend the Chancellor made in the Budget, we have brought down the contribution by local payers to such levels that it would be wrong for the right hon. Gentleman to indulge in scare stories in Leeds or anywhere else.

Dame Peggy Fenner: I am grateful that I caught your eye, Mr. Speaker, as I should have, being the Member who represents the area with the lowest community charge, apart from two London boroughs, which have heavy safety nets. Of course, my constituents will be pleased to have the extra money that my right hon. Friend concedes that they should have had from central Government. Will my right hon. Friend visit my constituency to find out how we produce value for money?

Mr. Heseltine: If my hon. Friend will come with me, I shall be delighted to attend upon her constituents.

Mrs. Margaret Ewing: I assure the Secretary of State that the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is totally wrong in assuming that the longer the poll tax is in place, the more popular it will become. The people of Scotland have testified to that in opinion poll after opinion poll, as we were used as guinea pigs one year in advance of everyone else.
When considering how to change this tax, will the right hon. Gentleman advise the House what assessment he made of the possibility of having in a unit the size of Scotland a local income tax, based on ability to pay, which could have been implemented in the next financial year? We should not be held back until 1993–94.

Mr. Heseltine: Again, I thank the hon. Lady. She was courteous in coming to talk to us and in giving her views—[HON. MEMBERS: "Oh."] It is embarrassing for the Labour party. I do not want to repeat my comments about the paucity of thinking behind the Labour party's views. All the other political parties joined our consultations, which were very profitable. We incorporated in the review many of the ideas which we discussed. A desperate bankruptcy exists, and it is to be found among Opposition Members.
We considered a local income tax, but we were not persuaded, for several reasons. First, within the totality of local government, entrusting local Labour authorities with setting the levels of income tax would have given them the power to reverse what was one of the main thrusts of Government economic strategy in the past decade. Secondly, in many local authority areas, where the number of income tax payers was relatively limited and the number of people on a form of rebate or exemption was high, the

danger was that people with significant resources would be imprisoned in an area without having any effective control over the outcome of elections there. Adding a local income tax to a national income tax would create confusion in people's minds as to which function or service they were financing—whether local or central.
There were many complicating factors. We decided that a local tax formula would leave a clear idea in people's minds that they were paying a local authority which they could identify for local services.

Mr. John Biffen: Is my right hon. Friend aware that when a flagship becomes a navigational hazard the best thing to do is to scupper? I congratulate my right hon. Friend on the professional way in which he has set about that job.

Mr. Heseltine: I understand something of my right hon. Friend's thinking, although I could never emulate his language.

Mr. Tony Banks: The question directed to the Secretary of State by the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) was the first example I have ever witnessed of a Brutus stabbing a Judas. After 11½ years, local government has been reduced to absolute chaos and muddle by the Government's policies. What the Secretary of State has done today is to snatch chaos from the jaws of the poll tax defeat, and local government will suffer for it.
The right hon. Gentleman says that the commission that he is to set up will be able to consult local people and that if local people wish a certain form of government to be instituted, that will be allowed. If the people of Greater London decide that they want a strategic local government structure in London, along the lines of the old Greater London council, will the right hon. Gentleman allow that to happen?

Mr. Heseltine: Having listened to the hon. Gentleman, I am even more convinced than I was before of the dangers of such a proposal. If the hon. Gentleman were in my position, perhaps he would pause before accepting the advice of a former councillor from Lambeth.

Hon. Members: What about the Prime Minister?

Mr. Speaker: Order.

Mr. Robin Squire: May I wholeheartedly congratulate my right hon. Friend on introducing a system which will seem much fairer to the overwhelming majority of people in the country and which retains the important concept that most people will pay something? Will my right hon. Friend confirm that, for the two years—or whatever period—for which the present system remains, he, and local authorities, will expect all those liable under it to pay, whether they are Opposition Members or people occupying less illustrious positions in society?

Mr. Heseltine: While I was listening to my hon. Friend's important question, I was conducting a further interim review of local government and, on mature reflection, I have come to the view that some councillors from Lambeth are really rather good people.
There can be no shadow of a doubt about the need to collect in respect of legitimate bills issued by the legitimate authorities of our local democracy. There can be no question about that and the utmost rigour should be


applied in enforcing the law. Nothing makes that harder than the utterly unforgivable behaviour of those hon. Members who do everything in their power to undermine the process.

Mr. Bruce Grocott: Does the Secretary of State accept that the most unbelievably arrogant part of his statement was his assertion that he would "improve the quality of local decision making"? That came from a representative of a Government the quality of whose decision making has so far cost us £13·5 billion. Will the Secretary of State assure us that any future assessment or review of the quality of decision making will include the quality of decision making in the Tory Government?

Mr. Heseltine: If the hon. Gentleman had spent even a tiny fraction of the time that my hon. Friends and I have spent consulting local councils, he would have discovered that what I said about the ability to manage local authorities and about the sort of people now attracted to them was not a party matter. Everyone is preoccupied about the problem of finding men and women with the time and resource to give to that vital part of our national life. By turning this into a party issue, the hon. Gentleman simply trivialises the debate.

Mr. David Howell: My right hon. Friend is to be commended on his unwavering determination to reform the structure, functions and financing of local government together, rather than—as in the past, with such unhappy results—separately. Certainly he will not get an atom of constructive help from the Labour party.
My right hon. Friend has not mentioned business taxation, although he did talk about a wider local government tax base. Will business taxation still be left out? Does he recall that a previous Secretary of State, during our debates on local business taxation, assured the House that close and intimate links between the local authorities and businesses in their areas would be reinforced?

Mr. Heseltine: I am very grateful to my right hon. Friend for his kind remarks. It is fundamental that, in the review, the structure, functions and financing of local government be linked. In my statement, I made it clear that the Government have no intention at present to make changes in the uniform business rate arrangements.

Mr. Ron Leighton: Has not the main cause of the suffering and turmoil in local government been the successive cuts in rate support grant—from 60 per cent. in 1979 to 42 per cent. today? The burden of taxation was switched from central government to local government so that the Government might take the credit for tax cuts, and the local authorities the blame for increased rates and cuts in services. Was not the purpose of the poll tax to sweep away Labour local government by imposing a large charge on everyone in the hope that the town halls would get the blame? The British people had too much intelligence to fall for that scheme. It backfired and swept away the right hon. Member for Finchley (Mrs. Thatcher). Is not the present commotion the sound of panic-stricken rats deserting the flagship?

Mr. Heseltine: The hon. Gentleman cannot have been listening. The switch in resources, at the expense of the

local payer, whether of rates or of the community charge, began in 1976 under the right hon. Member for Bethnal Green and Stepney (Mr. Shore). By 1979, the rate support grant had been reduced to 61 per cent. It is perfectly true that the change continued thereafter. Not until the Budget that my right hon. Friend the Chancellor delivered on Tuesday was the direction reversed. The reversal is to be maintained at about the present rate.

Mr. Roger Sims: Is my right hon. Friend aware that many of our constituents fully supported the principles that lay behind the community charge but thought that there were faults in the way in which it was implemented? People will feel that the proposals that he has presented in outline today meet the criteria and, at the same time, are practical. I congratulate him on his refusal to be pushed into presenting detailed proposals at this stage, and on his intention to put the matter out to consultation. That will provide the opportunity to ensure that, before matters are finalised, there has been proper discussion, that details have been worked out, and possible anomalies avoided.

Mr. Heseltine: I am extremely grateful to my hon. Friend for his remarks. We have tried very hard to adopt an evolutionary approach. The local tax meets certain criteria that are widely accepted, especially in the Conservative party. It is absolutely fundamental that changes of this sort be introduced following consultation with the people who will have to apply them. That is what we are doing, and we have no intention of allowing ourselves to be stampeded or forced to move faster than we think is compatible with proper completion of the job.

Ms. Mildred Gordon: Can the Secretary of State tell us whether women with no personal income who stay at home to look after their families will be expected to pay the new poll tax, head tax, adult tax—or whatever he calls it—and whether the joint and several liability proposals will still apply?

Mr. Heseltine: If the hon. Lady waits until we have produced the consultation document, she will see the assumptions upon which it is based. There will, of course, be a rebate scheme associated with our proposals. As for the period between now and the introduction, in 1993, of our local tax proposals, we have no intention at present to change the incidence of the scheme.

Sir Peter Blaker: My right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) appears to have confused the Ides of March with the equinox—not that either appears to be particularly relevant.
I congratulate the Secretary of State on one aspect in particular of his excellent statement, and that is the proposal to introduce more unitary authorities, which has the great merit of making it easier for the taxpayer to identify excessive spending authorities. Is he aware that that is particularly relevant in Lancashire, where there used to be several county boroughs and where we now have an excessively spending Labour-controlled county council?

Mr. Heseltine: My right hon. Friend represents his constituents extremely effectively because when I was in Blackpool not long ago I was left in no doubt about the depth of feeling there. I must not prejudge any local


consultations or recommendations of the local government commission, but I understand exactly the strength of feeling.

Mr. John Fraser: In relation to the £140 per head subsidy for the poll tax mark 1, does the right hon. Gentleman agree that it is wholly unrelated to the demands on, or resources of, the local authority? If there is to be a subsidy for the poll tax in the current year, should it not be based on the principle, from each according to his resources and to each according to his needs? In relation to the poll tax mark 2, will the registration arrangements be substantially different from those obtaining now?

Mr. Heseltine: I have already said that it is possible in the new arrangements that a register of the sort associated with the community charge will not be necessary. It is a detailed and technical matter that must be looked at. We shall be putting forward in the consultation document a number of options—they are not firm proposals now—to deal with the matter because it is important, as I have said several times, that the local authorities become involved at this stage in advising on the most effective way forward. If the Labour party decides to end its ostrich-like silence, we shall listen to what Opposition Members, along with everybody else, have to say.

Sir William Shelton: There will be great sighs of relief among my constituents in Lambeth as a consequence of the abolition of the community charge. Will my right hon. Friend please use his powers to cap the Lambeth budget, which is £8 million or £9 million above the £307 million allowed by the Government? On the other hand, will he urge his Department to be as sympathetic as possible over the back debt repayment due to Lambeth's inefficiency over many years? He must be aware that, of the present poll tax set by Lambeth, little over half is going to pay for the services of the council and the remainder towards the wretched debt accumulated by its inefficiency.

Mr. Heseltine: I am wholly in agreement with my hon. Friend. The new system that we introduce will, of course, be seen as a fair system, but it will also reflect the need for local authorities to bear down on their expenditure patterns. That principle will remain with the new system. It is worth saying that it is not just the community charge that the Lambeth authority does not collect. It does not collect the rents, and it did not collect the rates before the community charge was introduced. The most profound anxieties are developing about that local authority. They exist across the Floor of the House, and there are deep and justifiable concerns on the part of the Labour party because, after all, that party is in control there.

Mr. James Lamond: In the muddle of criteria, platitudes and principles contained in the Secretary of State's announcement, he seemed to forget two principles that we used to hear from the Conservatives. The first was that one could not solve problems by throwing money at them—even though the Conservatives then threw £4·25 billion at the poll tax problem—and, secondly, that the Government had no money of their own because it was all taxpayers' money. Those two points seemed to escape the right hon. Gentleman as he tried to get out of the muddle into which the Conservatives got themselves.
Why does the right hon. Gentleman think it behoves Opposition Members to give him advice now when he was

so well advised by us before he introduced the poll tax? We gave him advice on Second Reading, in Committee and on Third Reading of the measure which introduced the poll tax. He took no notice whatever of our advice. Why should we think that he will take notice of any advice that we give him now?

Mr. Heseltine: The more I listen to Labour Members, the more I wonder why I keep asking them whether they want to join the consultative process. Patently they have little to say. If I may offer a personal word of advice in commenting on the hon. Gentleman's welcome conversion to the view that one cannot solve problems by throwing money at them, it is lucky for him that there are so few of his hon. Friends left or he might be deselected.

Mr. Michael Mates: Will my right hon. Friend accept that many of us are relieved that the new proposals which he has announced today will take account of ability to pay because that is a fair system which is essential to any new tax? Will he accept that I and many of my hon. Friends to whom I have spoken about the matter will do all that we can to unite the party and the people behind the proposals, which this time have been fully discussed and agreed within a united Government and a united Cabinet? In the review, will he pay particular attention to the peculiar way in which the community charge operated among our armed services, who were subject to whims of movement over which they had no control and who must be considered fairly in the new arrangements?

Mr. Heseltine: I am extremely grateful to my hon. Friend for drawing attention to the consideration that we have given to members of the armed forces. If I may pay a tribute to my hon. Friend the Member for Salisbury (Mr. Key), the Minister in my Department who has taken a particular interest in the matter, he has showed great concern for those who played such a conspicuous part in the Gulf. We must all be grateful to him.
I am also grateful to my hon. Friend the Member for Hampshire, East (Mr. Mates) for referring to the fact that I have stressed ability to pay. My hon. Friend has taken a keen interest in these matters, and I am glad that he feels that what we have done today reflects his concern.

Mr. Dennis Skinner: Bearing in mind that the Secretary of State referred to a £140 reduction, will he tell us how many people will get a reduction of less than £140 under the new system, taking into account the first transitional relief scheme, the second tranche of transitional relief and the fact that some people pay only 20 per cent.? Since the Tories have consistently told us that 11 million people are not paying the full poll tax, can the Secretary of State tell us how many will not get the reduction of £140 and whether some will not get anything at all?

Mr. Heseltine: All the hon. Gentleman has pointed out is how generous are the schemes that we have already announced. Of course, if we have given people benefits once, we cannot give them benefits again.

Dame Elaine Kellett-Bowman: May I thank my right hon. Friend the Secretary of State and my right hon. Friend the Prime Minister for listening to those of us who come from low-rated areas in the north-west for lifting the burden from us? May I thank the Secretary of


State too for giving county towns the prospect of running their own affairs, as my colleagues in Blackpool and all the other areas wish to do, so that we may have the opportunity of getting out from under Lancashire county council once and for all?

Mr. Heseltine: I welcome my hon. Friend's observations. The north-west is a particularly important part of the country and we have considered its problems carefully. Again, I am enthusiastic about the way in which my hon. Friend is indicating that there may be local interest in some of the changes that we have in mind. I am sure that she will play her usual active part in pursuing them.

Mr. Allen McKay: The Secretary of State is well known for wanting to get rid of the poll tax, and his Minister of State is well known for wanting to retain it. I am concerned, therefore, that when the Secretary of State was making his statement the Minister for Local Government and Inner Cities was nodding in agreement.
It appears that we will get the worst of both worlds—a poll tax based on property. Can the Secretary of State tell me how the tax will be collected? Who will be responsible? Will each person be responsible for his own tax, or will one person in the property be responsible for the whole lot? As he is now keen on consultation, will the Secretary of State overrule his office and meet the leaders of South Yorkshire county council—the South Yorkshire authority—whom his office has refused to meet concerning a difference of opinion among his office, the Department of Transport and ourselves about the funding of the super tram?

Mr. Heseltine: We are in some confusion as to which authority the hon. Member has in mind, but we run an ever-open-door policy in the Department of the Environment and I am sure that we will bring our usual courteous attention to bear on any formal requests that we receive.
The hon. Member referred to the support that my hon. Friend the Minister for Local Government and Inner Cities was giving to what I said during my statement. It would have been impossible—if I do not embarrass him in front of the Prime Minister—for any Minister to give more support to the Secretary of State than my hon. Friend has given me on this matter.
The hon. Member asked how we will collect this local tax. I said in my statement that there would be a single bill to the household; and that will be exemplified in more detail in our consultative document.

Several Hon. Members: rose——

Mr. Speaker: Order. I am very anxious to ensure that all hon. Members who wish to put a question on this very important matter shall do so. I ask hon. Members, in view of the fact that many of the questions have been answered by the Secretary of State, to put new questions and perhaps single questions, and then all of them will be called.

Mr. Michael Brown: I have never made a secret of my support for the community charge, but, as one who has the misfortune to represent a constituency in the ghastly overspending county of

Humberside, may I tell my right hon. Friend that the structural reform proposals that he has announced today make his statement worth studying very closely with a view to giving it wholehearted support, not only on the structure but also on the finance? It is the structural reform as well as what my right hon. Friend the Chancellor of the Exchequer said on Tuesday which makes it possible now for us to get local government bills down for the people who have to pay them.

Mr. Heseltine: In the spirit of the day, I shall have to continue my consultations with my hon. Friend in order to be sure that he can give me wholehearted support later on.

Mr. D. N. Campbell-Savours: Is it not fair to say that what the Secretary of State has announced today is nothing more and nothing less than poll tax mark 2, insofar as it relates to the number of individuals in a household and will also call upon information held in the register of electors? Is that not the case?

Mr. Heseltine: No change is necessary in the basis of collecting information in any new system that we have in mind. No one has raised this issue as a problem in the course of designing it. No one has raised it with me as a problem in moving from the community charge to the local tax, so I have no reason to suppose that there is any problem that I must account for.

Mr. Ivan Lawrence: As we have so acceptably slashed the burden of the community charge upon the charge payer, and as my right hon. Friend has so courageously decided that we could get rid of county councils if the local authorities wanted, some of us are left wondering why it is necessary to introduce a complex property tax which most of us have spoken against for the past 20 or 25 years. Will my right hon. Friend give some assurance that refusal to pay this tax, which might be branded as uncollectable, will not be a reason for withdrawing it in due course?

Mr. Heseltine: I hope that my hon. and learned Friend will feel that, as the last question but one referred to it as a poll tax and he sees it as a property tax, it may be that I am entitled to insist that it is a local tax and cannot be defined in any of the neat packages that are being used so to do. I believe that it will be seen as a tax which complies with the principles that I have set out, which means that most people will pay towards it, it will reflect people's ability to pay and it will be seen as fair. It is in no way capable of being described by either of the labels put on it.
What I have said today is not a prescription for getting rid of counties or districts; it is to look at the administration of local government on the ground and come to a view of what makes sense.

Mr. Nigel Spearing: Does the Secretary of State realise that, ever since he first became Secretary of State for the Environment, local government has suffered greater difficulty and its ability to deliver quality services has been reduced? Is he aware that this review will further prejudice the ability of local government to work properly and that it will reduce the confidence and the professional expertise of those who are professionally involved?
When the Secretary of State says that the 22 per cent. and the means of obtaining it will be reviewed, does he


include by definition the poll tax or "head" element, or would he permit other ways of raising that relatively modest 22 per cent. Of tax?

Mr. Heseltine: I do not identify the figures that the hon. Member gave from what I have said. If he has any further exemplification that he wants to put to me, perhaps he will write to me and I will try to deal with it. I cannot accept for a moment, however, that what I have proposed will do other than enhance the possibilities and prospects for local government. In all seriousness, my Ministers and I have spent an inordinate amount of time, with great pleasure, talking to councillors of all political parties who have put to us a remarkable consensus of view on what should be done; and it will not serve the best interests of local government if the Labour party now tries to besmirch the opportunities that we are determined to achieve.

Mr. James Couchman: My right hon. Friend's statement will receive a warm welcome in my constituency where it will be widely seen as promoting a fair system of providing local government finance, in particular, his assurance that properties in the south-east will not be disproportionately disadvantaged because of high value. Will he take it from me, however, that there is a disproportionate disadvantage to business properties in the south-east which were revalued at a time of historic highs in trading and where the UBR has had a disproportionately large impact?

Mr. Heseltine: I am grateful to my hon. Friend. I can reaffirm our clear awareness of the imbalances that are thrown up by capital values between one part of the country and another. When we publish our consultation document, my hon. Friend can rest assured that we will address that issue directly. We are also quite aware that there have been changes in valuation since the initial uniform business rate valuations. There are proposals for a regular revaluation process, but I would be very surprised if we have not seen a restoration, at least in substantial part, of the values of south-eastern property by the time we get to that point.

Mr. David Winnick: Is the Secretary of State aware that, as long as everyone in the household has to pay the same amount of money minus any rebate, it will be totally unacceptable? Why is it that the Secretary of State and, indeed, the Cabinet have responded to those members of the Conservative party in the House of Commons who clearly want to keep the poll tax, as has been indicated this afternoon, instead of listening to the overwhelming number of people who time and again have said that they want no poll tax, mark 1, mark 2, mark 3 or anything else? Is it not clear that when the elections come—the May local government elections and the general election—the British people will reject the mark 2 poll tax as they have rejected the mark 1 tax?

Mr. Heseltine: I am sure that the hon. Member will do his best with wholly inadequate arguments to put that case forward, but he will find that it is not very successful, particularly as he will have to explain how his own party is proposing to go to one system of local government finance in one year and then tear the whole thing up and go to another in the following year. He will also have to explain how his party will finance both those systems when

it has rejected the proposal of my right hon. Friend the Chancellor of the Exchequer to put £4·25 billion into the system.

Mr. Patrick Cormack: Is my right hon. Friend aware that in south Staffordshire there will be few tears for the poll tax but many cheers for the courage that the Prime Minister and he have displayed? Is he further aware that as long ago as 1974, when the Labour party was in office, our right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) was co-sponsor of a Bill which would have introduced the sort of system that he is now advocating and which would have saved us a great deal of aggro?

Mr. Heseltine: My hon. Friend will not expect me to go too far back in history. When dealing with local government, history has a way of rearing up and smiting one. I thank my hon. Friend for the tribute that he paid to our right hon. Friend the Prime Minister, who has unquestionably played the decisive role in bringing about the conclusion that I have announced today.

Mr. Dave Nellist: The Prime Minister said on Monday night that the poll tax was uncollectable because so many people were not paying it and the courts were overloaded. Does the Secretary of State realise that, despite the rout today and on Tuesday, in the words of a saying, it is not over until it is over, and it is not even over then? There are 15 million people in Scotland, England and Wales facing prosecution, the threat of bailiffs or the threat of gaol and the Secretary of State has said nothing about them today. Unless that threat is lifted and compensation is provided to the millions of others who went into debt to try to pay the poll tax, he will find that those numbers will increase from 1 April and that the flagship of the right hon. Member for Finchley (Mrs. Thatcher) will be his Titanic.

Mr. Heseltine: The hon. Gentleman is wrong. I made express reference to that point, and the answer is clear. The law is the law and bills have to be paid.

Mr. David Gilroy Bevan: I congratulate my right hon. Friend on his excellent proposals. Will he bear in mind the reprehensible behaviour of authorities such as mine in Birmingham, which, in setting the new poll tax level, incorporated the Government's transitional relief of 65 per cent. and £25 extra to allow for non-payers of the present rate, making the total £150 higher than the Conservative proposals? Will my right hon. Friend ensure that the non-payers are brought to heel as 50 per cent. of them have followed the advice of Birmingham city councillors about non-payment and are council employees?

Mr. Heseltine: I share my hon. Friend's concern. Perhaps he will share the dilemma of the Secretary of State for the Environment, who knows that the irresponsible behaviour of Labour councillors is an every-day, inbuilt definition of the job that he does.

Mr. Harry Cohen: Does not the Secretary of State think that keeping the poll tax in 1992–93 as well as in 1991–92 is totally unacceptable? Does he have so little confidence in his hybrid tax that he has to keep the poll tax that extra year? If by any horror the Tories should win the


next general election, what is to stop the headline figure for the poll tax for 1992–93 soaring again? Is not the poll tax still the curse of the undead?

Mr. Heseltine: The hon. Gentleman obviously did not follow my right hon. Friend the Chancellor's statement. He made it clear that he intends to preserve in subsequent years the balance that he has struck for 1991–92. Of course that will not deal with overspending local authorities. It will deal with Government support and maintain it at the same levels as have been broadly outlined by my right hon. Friend the Chancellor, but if local authorities choose to overspend it will still leave bills of unacceptable levels for the local community.
The hon. Gentleman also asked whether we should move faster. The practical solution is that there is no way of moving from where we are today in a quicker time scale than that I have outlined. That is why the Labour party is prepared to inflict on local government two different systems in two consecutive years.

Mr. Robert Boscawen: Does my right hon. Friend accept that many of us supported the community charge because of the unfairness and inequality of the old rating system? I feel sure that my right hon. Friend will agree that it is absolutely right to hold further discussions with the people who thought that the community charge was unfair. Let them give their views as to how we can make the new tax fairer. Let us hear their views before we settle into another system.

Mr. Heseltine: I appreciate my hon. Friend's point. We have considered this matter carefully in Government and have decided that there must be a degree of certainty about our intentions. That is why we have announced that our new local tax will be in place, hopefully, by 1993–94, which we believe is the earliest practical time that that can be achieved. I wholly accept my hon. Friend's point about the unfairness of the old rating system. That is one reason why one is utterly aghast that the Labour party wants to bring it back.

Mr. Max Madden: Is the Secretary of State aware that he has cut a sad and sorry figure today? He has looked and sounded like an old-style ship owner with a leaky old tub on his hands who is not sure how much longer it will stay afloat, how much longer passengers will be willing to pay, how much he is willing to charge them or how he will count them on board. I appeal to the Secretary of State and, more importantly, to the Prime Minister to ease the grief and misery of the British public, sweep away all the commissions, consultative documents and discussion papers and let the people of Britain have a general election so that they can choose between the Tory poll tax mark 2 and Labour's fair rates plans.

Mr. Heseltine: If the hon. Gentleman is pressing my right hon. Friend the Prime Minister to hold a general election so that the electorate may be better informed, I am sure that he will press his right hon. Friends on the Front Bench to provide the basic information needed to enable a proper judgment to be made about the relative merits of both systems.

Mr. Ian Stewart: I thank my right hon. Friend and his colleagues for the care and thoroughness with which they conducted the consultations before bringing forward today's proposals. I also thank my right hon. Friend for taking into account the fact that many of us believe that there were not only serious defects in the rating system and the community charge but that by avoiding those and incorporating the better part of those two systems the proposals are likely to command widespread approval in the House and outside. Will my right hon. Friend be reassured about the effectiveness of his statement by the looks of frustration and disappointment on the faces of Opposition Members?

Mr. Heseltine: My hon. Friend has made a discerning observation about the Labour party. It might feel that one of its arguments had disappeared out of the window.

Mr. John Battle: In setting out his proposals for the longer term, the Secretary of State said that most people should make some contribution. Until now the Government have insisted that everyone must pay at least 20 per cent. Who will be exempt in the future, and why cannot those categories and individuals be exempt now?

Mr. Heseltine: The hon. Gentleman has obviously not followed the way in which the community charge works. The 20 per cent. was, in large measure, reimbursed through the social security system for those on full benefit.

Sir Geoffrey Johnson Smith: I warmly congratulate my right hon. Friend on his statement. I represent a constituency where average house prices in relation to average incomes are much higher than in most parts of the country. Will my right hon. Friend pay special care and attention to the need to ensure that in those circumstances the new system of local taxation will be fair and reasonable?

Mr. Heseltine: I assure my hon. Friends that we are fully aware of the regional disparity in capital values and the need, therefore, to address that specifically. It will be in the consultation paper. I would go further than that. Like everybody else, I keep an eye on what is reported in the newspapers. I have seen figures quoted for the effect of the proposals that we have in mind for certain parts of the country, principally the south-east, which bear no relationship to reality.

Mr. Harry Barnes: Will there be a new poll tax register for the new poll tax, or will the electoral register be used? Different answers have been given to different Opposition Members. It will be a disgrace if the electoral register is used because it will be a direct tax on electoral registration, and that would concern us all. Even with a separate poll tax register, last year 600,000 people were missing from the electoral register. Will the Government produce figures for the position this year? The problem is that these proposals are simply an attempt to have something to say in a general election.

Mr. Heseltine: I have answered that question several times. I said that under the new system we shall not need a register. I have made that clear. Answers to such quesitions will be clear in the consultation document.

Sir John Wheeler: Does my right hon. Friend accept that his statement will receive a broad


welcome, not least because of the proposed review of structure and functions? Does he agree that the unitary authorities of the 32 London boroughs provide a good example of successful structures? Does he also agree that it is necessary to consider the functions of local government expenditure, especially with regard to national services such as the police and fire services?

Mr. Heseltine: I am glad to respond to my hon. Friend. The unitary model in London is preferable to that which existed before, especially for the large urban conurbations. There is no question but that the Government's decision to get rid of the Greater London council, the metropolitan counties and, later, the Inner London education authority has been a remarkable success. It clarified matters and saved money and jobs. That is important. In the context of the review, I do not think that we intend to make further changes to the structure of the London authorities. However, the functions that they perform and their internal management would be included in the consultative process that I have described.

Mr. Bob Cryer: Does the Secretary of State acknowledge that, had the rate support grant remained at its 1978–79 level, the current poll tax would not be £250, as is proposed, but £150? Are not the Government the biggest robbers from local government funds? The record of the Government's attack on Labour-controlled authorities dates back to the Local Government Act 1972, which was the first to cause chaos, to the attack on the metropolitan county councils and on the GLC, all of which were Labour controlled and all of which were abolished because of a political vendetta carried on by the right hon. Gentleman and his cronies. What safeguards will he provide to ensure that the local government commission will not be a Tory quango with the sole aim—secretly, behind closed Whitehall doors—of abolishing Labour-controlled authorities?

Mr. Heseltine: The hon. Gentleman should not tempt me. The idea would not have occurred to me if he had not put it into my mind. Having considered it—albeit briefly—I reject it. As is customary, the independence of the commission will be secured.

Mrs. Maureen Hicks: Does my right hon. Friend agree that it is only as a result of the introduction of the community charge that local spending was put under the spotlight by encouraging all members of the community to analyse the quality of services and the calibre of councillors? I have no objection to any of his proposals because they marry two systems. Had he not retained an assessment of the number of people in a house but reverted to the archaic system proposed by the Opposition, this would be an old-fashioned party. I welcome the fact that he will continue to consider carefully the internal workings of local authorities. If not, there could be no guarantees of value for money. We must consider contracting out the management of housing and education. If my right hon. Friend wants evidence of poor housing management, will he please come to Wolverhampton? I could fill a book for him.

Mr. Heseltine: It looks as though I shall be busy visiting my hon. Friends' constituencies, which will be a great pleasure. I support what my hon. Friend said. She has particular expertise in internal management systems. I

agree that that issue has not been considered for too long, but it will be considered in the consultation exercise that we have promised today.
My statement reflected my agreement that we must move further and faster towards the concept of enabling authorities to offer choice and have competition and to see the vast baronies of power moved from the public sector to a more competitive sector. The idea of marrying two systems by reflecting the number of people in a household was always one of the preferred ingredients of the package from the earliest days of our review.

Ms. Marjorie Mowlam: How will the Secretary of State's announcement affect one policy which especially concerns the public and which local authorities are already trying to implement—community care?

Mr. Heseltine: I am grateful to the hon. Lady for asking that question. The Government have announced their plans. Local authorities know the timetable, and nothing that I have said today changes the Government's known position.

Mr. Michael Latham: This is today's shortest question: can we have Rutland county council back, please?

Mr. Heseltine: I am tempted to say, "If you want it", but I must be allowed to define "you" in a very wide compass.

Mr. Peter L. Pike: Much of the Secretary of State's statement was taken up with setting up consultations and commissions to rectify the actions taken by the Government since 1979 and the reorganisation by the previous Tory Government of 1970–74. The words that he used to commend the sanitised version of the poll tax—poll tax 2—were similar to those used to commend the original version. Why should the people of Burnley, which is Labour controlled and has a low poll tax, and the people of Ribble Valley, part of which I represent, which is Tory controlled and has a high poll tax, have confidence that the Government have got it right? How much has this sorry saga cost the nation over the past two years?

Mr. Heseltine: The people of Burnley may like to consider the level of expenditure in the Labour-controlled county council of Lancashire. That might colour their view. The verdict in Ribble Valley is that we shall have a Tory Member of Parliament there after the next election.

Several Hon. Members: rose——

Mr. Speaker: I shall do my best to call hon. Members. Will they please ask brief questions?

Mr. Anthony Steen: Since most questions have already been asked, besides welcoming the excellent statement, may I ask my right hon. Friend about local government reorganisation? Does he intend to give greater powers to parish councils, especially on planning matters? May I also ask about privatisation and contracting out? Does he envisage the contracting out of planning departments and their architects and planners?

Mr. Heseltine: My hon. Friend asks two interesting questions. I have no plans to change the present regimes of the parishes. I do not wish today to be drawn on the


question of contracting out planning departments, but there are some interesting ideas about how they could be changed.

Mr. Richard Tracey: I welcome my right hon. Friend's recognition of the strength of the unitary authorities and the essential factors of comparability between authorities and accountability. If a consensus emerges for the assessment to be based on capital values, will my right hon. Friend consider carefully the idea of capital values being based on rebuilding costs rather than on market values? That might help to smooth out things across the country.

Mr. Heseltine: I am aware that there are many ways of assessing capital values, one of which is by reference to building costs. I ask my hon. Friend to wait for the publication of our consultative document, which will set out a range of options. We can then hold detailed discussions.

Mr. James Cran: On the structure of local government, my right hon. Friend will be aware that in an interim report the Boundary Commission has already decided to recommend the abolition of Humberside county council. When the final report is published, can he assure my constituents in east Yorkshire that that will suffice to get rid of the county and that it need not be re-examined?

Mr. Heseltine: I fully understand my hon. Friend's eagerness. However, he will understand that I am in a difficult position and that I cannot comment on his question.

Mr. Richard Holt: Given the enormity of his task, may I, too, congratulate my right hon. Friend on coming forward so quickly on the restructuring and refinancing of local government? If my right hon. Friend listens for a moment, he will probably hear the cheers ringing out from Cleveland at the echo of the fact that that authority is about to go. In the meantime, may I ask my right hon. Friend to watch carefully the activities of that local council? It is currently spending £680,000 on a brainwashing exercise for the people. The council may try to spend similar sums over the next two or three years to save its own rotten neck.

Mr. Heseltine: My hon. Friend, as a former local authority leader, has a great insight into the things which local councils occasionally get up to. I am sure that he would not have played any part in such things himself.

Mr. Roger Moate: May I warmly congratulate my right hon. Friend on the Government's approach to local government reform? It will compare favourably with some of the more lunatic proposals for regional government and the like being peddled by all the Opposition parties. On local government taxation, does my right hon. Friend understand that many of us still feel that the burden being imposed on local government is too great? Having started the shift from direct local government taxation to indirect, centralised taxation, will he confirm that he will not preclude the possibility of continuing that process in the course of his consultation?

Mr. Heseltine: It would be only realistic of me to tell my hon. Friend that my right hon. Friend the Chancellor has been more than generous. He has not only made a significant shift, but he has committed himself to preserving broadly the balance that has been struck. It would be unrealistic to imagine that that will be changed.

Mrs. Teresa Gorman: Will my right hon. Friend accept my congratulations, especially on the earlier part of his statement in which he rightly identified the cause of the problem to be the uncontrolled appetite of local government for more spending? We now face the problem of how to curb that. Will he assure us that he will pay special attention to the true alternative to the community charge—which, incidentally, will be mourned by my constituents who thought that it was a valiant attempt to do the right thing about local government? The alternative is to consider whether services need to be provided by local government or whether they could be carried out more effectively through a competitive marketplace.

Mr. Heseltine: My hon. Friend raises important issues. I wholly support what she says about the need to control spending and to get value for money. It is possible to marry together the provision of local services by enabling authorities with the fact that they do that by contracting out services.

Mr. Andrew MacKay: Although I readily acknowledge that this afternoon my right hon. Friend has made great progress in the reform of local government finance and structure, may I assure him that in densely populated counties, such as Berkshire, there is a great desire for unitary authorities? Unitary authorities mean boroughs and districts, and not counties.

Mr. Heseltine: I am grateful to my hon. Friend for stressing the popularity that could flow from the concept of unitary authorities. We must now wait until we have a chance to test that in practical terms on the ground.

Mr. Teddy Taylor: On the concept of a property tax based on capital values, will my right hon. Friend explain whether the general principle is that a family of three on average earnings living in a £200,000 house would pay twice as much as a family of three on average earnings living in a £100,000 house? Will he also explain what on earth will happen to water rates if we move from rateable to capital values? Will we now pay for our water on the basis of how much the house is worth?

Mr. Heseltine: My hon. Friend will know that we have in mind over a period to move away from water rates, and the water companies are now considering that matter. It is for the complexity of reasons to which my hon. Friend has drawn our attention that the Government have decided not to adopt a property tax.

Mr. David Martin: Does my right hon. Friend accept that there will be a wide welcome in Portsmouth for the opportunity once more to run its own affairs 100 per cent. in Portsmouth rather than having to rely on Hampshire county council—and the sooner the better for Portsmouth?

Mr. Heseltine: I must dampen the enthusiasm of some of my hon. Friends who already assume that we shall set up the local government commission and shall make


judgments such as they wish to see within a short time. We must go through a proper process of local consultation once we have set up the commission, and we must test people's mood of what they want.

Mr. Ian McCartney: Will metropolitan authorities be included in the review, given that the unitary principle for local government has been working well in metropolitan authorities, despite Government attempts to sabotage it? Will he give a commitment to the Association of Metropolitan Authorities that the current metropolitan authorities at borough level will continue after the review?

Mr. Heseltine: In reply to an earlier question, I said that I did not anticipate changing the structure of the metropolitan authorities.

Mr. James Pawsey: Is my right hon. Friend aware that his statement today will be seen as good news by the majority of the British people? They will see his proposal as a far fairer method of funding local government. His statement, which included a reference to the fact that local people will be able to choose, the form of local authority that they prefer, will also be widely welcomed. What impact will his statement have on rate-capped authorities such as Warwickshire?

Mr. Heseltine: I have explained our position on rate capping for the current year. I have no changes in mind as a result of anything that my right hon. Friend the Chancellor or I have said during the past two days. I have explained clearly that we shall look for restraint in local authority expenditure next year, especially in view of the considerable additional money which has been put in to reduce the community charge to its lower level. To ensure that, we shall have to anticipate the rigorous use of capping powers.

Mr. Patrick Nicholls: My right hon. Friend deserves great praise for coming forward with a system that should answer many of the points of unfairness that are perceived in the present system. One of the flaws of the present system is the seeming inability to control local authorities that seem hell-bent on levying at a rate greater than they should. Capping has proved an imperfect instrument for achieving that control. There are some councils—regrettably some are even Conservative—in which the councillors seem to be incapable of resisting the money-spending propensities of the officers who run them. Will it be possible to bear those factors in mind in the review?

Mr. Heseltine: My hon. Friend makes an important point. The awfulness of some of the high levels of expenditure is that they often go hand in hand with some of the least effective deliveries of services. There is no doubt that the capping regime has had its effect and that it will be a necessary part of our controls as we introduce our new system.

Mr. Robert Banks: I congratulate my right hon. Friend on his proposals for consultation with local people about the future of their local government. On the local tax, will he tell us whether he is taking fully into account the cost and the whole operation of valuing properties with the consequent disputes, appeals and fluctuating values, which will have to be taken into account? Will he keep his ears open to alternative

suggestions, such as the measuring of property, which would be a far simpler and more accurate way to deal with the matter?

Mr. Heseltine: My hon. Friend begins already the process that will flow from the publication of the consultative document. We have ideas, and colleagues may feel that some are rather more effective than the necessity to value every house precisely, although that is one option that we must consider. However, I do not wish to be drawn on that today in advance of the consultative document on the options that we are about to put forward.

Mr. Ian Bruce: My right hon. Friend will know that the devil is always in the detail. He will not be surprised to know that in a low-spending area such as south Dorset people were pleased when the community charge was sold to them on the basis that they would pay 25 per cent., business would pay 25 per cent. and the Government would pay 50 per cent. They were less pleased when they found out that they were paying 45 per cent., business was paying 45 per cent. and central Government were paying 10 per cent. My right hon. Friend has announced today that the local tax percentage will be about 22 per cent. Will that apply to people in south Dorset, or will they subsidise people in other areas? Can my right hon. Friend, as the Minister responsible for England, assure the House that English local taxpayers will pay the same percentage as Scottish and Welsh local taxpayers?

Mr. Heseltine: My hon. Friend represents a beautiful part of our country. He will realise that other areas have wider and sometimes deeper problems. Therefore, there are equalisation processes and the figures that I have given are average figures from across the country. That will remain the position. There will be a variation within those, depending upon the characteristics of the local areas.

Mr. Michael Irvine: Will my right hon. Friend take it from me that the poll tax has been intensely unpopular in Ipswich, among most of my constituents, and that there will be widespread rejoicing at the comprehensive and well-merited butchery job that he has done on it this afternoon? However, while the unfairnesses of the poll tax have been resented, there has also been a widespread acknowledgement that the old domestic rating system was unfair. One of the great merits of the proposals that my right hon. Friend has announced this afternoon is that they are directed towards putting right the unfairnesses not just of the poll tax but of the old domestic rates system.

Mr. Heseltine: My hon. Friend is right to remind us of the unfairnesses of the old rating system, to which the Labour party is now committed. However, I would not accept the graphic language that he used in describing me as having been involved in a process of butchery. I feel that I have been curing the joint.

Mr. Tim Janman: I congratulate my right hon. Friend on seemingly retaining some elements of the community charge and on giving a welcome added impetus to the need to contract out more local government services. When he publishes his consultation document, will my right hon. Friend clarify which of the different criteria that will now have an effect on what a household pays will be more important? In other words, will two


people living in a house worth £100,000 pay more than four people living in a house worth £50,000, all other things being equal, or vice versa?

Mr. Heseltine: My hon. Friend will immediately recognise that that depends entirely on the weight that we put on the two elements of the new local tax. This will be one of the many matters about which we shall be consulting. I support what my hon. Friend said about contracting out.

Mr. Barry Field: Did my right hon. Friend hear the Liberal Democrat spokesman, the hon. Member for Berwick-upon-Tweed (Mr. Beith), say on Radio 4 that he expected that the natural drift of the reform of local government would be to the district or borough councils? Does my right hon. Friend agree that that will be good news for our borough councillors as they go into the borough council elections? Does he understand that, with 43 county councillors, 64 borough councillors and 29 parish and town councils on the Isle of Wight, my constituents will be ticking off the days until 1994? Can he confirm that it is no accident that he promised us that the new system will be in place by April 1994, just before the county council elections? County councils have been the pick-pockets of community charge payers throughout this whole transaction.

Mr. Heseltine: I have had the privilege of visiting my hon. Friend in his constituency, and those points have been put to me on earlier occasions with equal eloquence.

Mr. David Blunkett: I understand that it is the Secretary of State's birthday. I hope that he has happier birthdays in future. I apologise for blowing out his candles.
Does the Secretary of State understand that, in announcing that he has rid us of the poll tax and in telling the hon. Member for Southend, East (Mr. Taylor) that he is not adopting a property tax, he has invented a hybrid donkey tax which stands on sand and is kept alive by being fed carrots? The Secretary of State has suggested this

afternoon a tax that he is not willing to spell out, a tax without a valuation system, and a tax that retains the 20 per cent. contribution, some form of register and the proposals for water metering while not solving the basic problem of ability to pay.
Will the Secretary of State concede that any new valuation system will take at least two years to implement from the day that legislation is completed? That means that, if the Conservatives stay in office, apart from those who live in Wandsworth and Westminster—the only people who have seen their poll tax abolished-the country will have to suffer the poll tax until April 1994. We will suffer the chaos, the cost and the confusion for the simple reason that the Government refuse to accept our fair rates proposal because they are hooked on the idea of numbers rather than on income and fairness and are determined at all costs to get through the general election before announcing what they mean to do.

Mr. Heseltine: The hon. Gentleman has raised matters that have been covered exhaustively in the past two hours. I can only say that, if he thinks that his system will stand scrutiny alongside ours, I am happy to compare them detail by detail. I am happy to put his system to the local authority associations for their views so that it can be compared with ours. The hon. Gentleman and the Labour party talk as though we have caused chaos for local government, but I can think of nothing more likely to do that than to introduce two totally different systems of local government finance in two consecutive years. That Labour party policy is unacceptable. It is unacceptable in its own right, but when its plan means that one of those years will see a return to the discredited rates system, it is doubly unacceptable.
I do not confirm that a valuation should take the time envisaged by the hon. Gentleman. Valuations can be carried out much more expeditiously, and we will discuss ways to do so in the consultation document.
The overwhelming view of the House has been a broad welcome for what I have announced today. It has given local government a new sense of opportunity. We are determined to build on that and to develop it. I commend our proposals to the House.

No Confidence Motion

Mr. Neil Kinnock: On a point of order, Mr. Deputy Speaker. In the wake of the statement that we have heard, I take this opportunity to give notice to the Government and the House that my right hon. and hon. Friends and I are today tabling a motion of no confidence in Her Majesty's Government. It is:
That this House has no confidence in Her Majesty's Government in the light of their inability to rectify the great damage done to the British people by the poll tax.

Mr. Deputy Speaker (Mr. Harold Walker): That will have been heard by the Leader of the House, who is in his place.

Further Education

The Secretary of State for Education and Science (Mr. Kenneth Clarke): With permission, Mr. Speaker, I will make a statement about the Government's plans for the reorganisation of further education in England.
We are determined to achieve better standards throughout the education service. The national curriculum is improving teaching and motivating young people in schools as never before. Parental choice is being exercised in more and more schools. A new and clearer system of vocational qualifications is beginning to open up exciting opportunities for school leavers. The proportion going on to higher education has nearly doubled since this Government took office, but we still lag behind our competitors in the participation of our school leavers in further education and training, and their achievement of useful qualifications.
I believe that the further education colleges have a vital role in providing education and training for both school leavers and adults. They have never in the past been given the attention that their importance in education policy should justify. Through links with business they are well placed to provide the knowledge and skills needed in the workplace. The Education Reform Act 1988 has given them greater managerial autonomy and they are recruiting more students, but they are still subject to bureaucratic controls from local authorities. They lack the full freedom which we gave the polytechnics and higher education colleges in 1989 to respond to the demands of students and of the labour market. The polytechnics are demonstrating quite spectacularly the gains in increased student numbers and increased efficiency without any loss of academic standards that can be achieved with full independence.
The Government therefore propose to introduce legislation at the earliest opportunity to form a new sector of post-16 education from April 1993, by taking all further education colleges offering full-time education and all sixth form colleges out of local authority control. They will be funded directly by the Government, through a council appointed by and responsible to me. The funding regime will consist of a basic annual budget together with an element dependent on the numbers actually enrolled. It will be designed to provide a powerful incentive to recruit additional students and reduce unit costs. The further education colleges will also assume responsibility for some adult continuing education.
Spending by local authorities on further education colleges and sixth form colleges in England currently totals over £2 billion of current spending and £100 million of capital. That will become central Government spending with a corresponding reduction in grant to local authorities.
The colleges will work closely with the training and enterprise councils. The Government attach great importance to the developing partnership between TECs and other local interests in education and training. We have already given TECs specific responsibilities in work-related further education. They and the new independent colleges will have much to gain from close co-operation. The colleges will own their assets and employ their own staff. They will provide for an


ever-increasing proportion of our young people the preparation they need for their working life in the rest of this decade, and in the 21st century.
I have a duty to ensure that the interim period before the establishment of the new independent sector is as smooth as possible. We must place the interests of the student first and ensure that the work of colleges continues undisturbed. I intend to give the right of transfer of employment to the staff of the colleges that will form the new sector.
I intend to vest the institutions, which I propose will be free-standing corporate bodies, with the land, buildings and plant which they currently use. I intend to seek Parliament's approval in the legislation that I shall introduce for a measure which requires my specific consent for all disposals by local education authorities of land or interests in land, including buildings used or held or obtained for or in connection with the purposes of the institutions.
I am concerned that from now on local authorities should not enter into new contracts which bind the colleges beyond 1 April 1993 when they begin to manage their own affairs. Such contracts should be entered into only with the specific consent of the governing bodies of the institutions affected. Contracts for a consideration having a value in excess of £50,000 will in addition require my consent. The forthcoming legislation will seek Parliament's approval to a measure with this purpose. I shall also seek Parliament's approval for appropriate sanctions where consent has not been obtained in advance.
I shall seek Parliament's approval for these transitional measures to have effect from midnight tonight. In this way, I intend both to put beyond any doubt the long-term future of the colleges and to enable the transition period to be as smooth and trouble-free as possible. I am placing further details of these measures in the Official Report. My Department will write to all LEAs to explain how these measures will be applied.
These developments will still leave much of the education of young people with school sixth forms. I assure the House of my determination to see good sixth forms continue. Whether under local authority control or in the grant-maintained sector, proposals for the opening of new sixth forms and the closure of existing sixth forms already have to come to me for approval. I shall use the powers available to me to ensure that sixth forms thrive, and to encourage choice between schools and colleges wherever possible.
This new sector of education will have a great deal to offer our young people. Indeed, it is the education and training of our 16 to 19-year-olds which will be at the heart of a White Paper which will come jointly from my right hon. and learned Friend the Secretary of State for Employment and myself in due course. That White Paper will contain further details of the proposals that I have just described. I believe that the proposals will be widely welcomed by all sections of the community, especially those which have always sought to further the interests of further education in Britain. I commend the proposals to the House.
Following are details of the measures:
The Government propose to introduce legislation this autumn to form an independent sector of post-16 education fromApril 1993. All further education colleges, maintained or

assisted by a local education authority, offering full-time education, including tertiary colleges, and all sixth form colleges, that is maintained schools which normally provide education only for pupils who have attained the age of 16, will be taken out of local authority control. They will be funded directly by the Government through a new council appointed by and responsible to the Secretary of State. New sixth form colleges and further education colleges, including tertiary colleges, which are established after this announcement will also be funded through the new council, including any grant-maintained sixth form colleges.
Institutions in the new sector, apart from volutary sixth form colleges, will be free-standing corporate bodies, and will be vested with the land, buildings and plant which are currently used by them. I intend to seek Parliament's approval to legislation which requires the specific consent of the Secretary of State for all disposals by local education authorities of land or interests in land, including buildings, used or held or obtained for or in connection with the purposes of the institutions. I shall seek similar powers to ensure that the LEA's interest in any land, including buildings, used or held or obtained for or in connection with the purposes of a voluntary sixth form college are not disposed of without the specific consent of the Secretary of State and that the LEA conveys its interest in these to the trustees of the school.
The disposals of land or interests in land requiring the consent of the Secretary of State will include outright sale, granting or otherwise disposing of any leasehold or other interest in land, direct sale and leaseback, any mortgage or other charge designed to raise capital on the security of the land. It will also include any disposal which is made in return for the supply of goods or services. In referring to disposals I include entering into any binding obligation to make a disposal of the kind in question.
To ease the interim period before the establishment of the new sector, I am concerned that local authorities should not enter into contracts which bind the colleges beyond 1 April 1993 when they begin to manage their own affairs. Such contracts should be entered into only with the specific consent of the governing bodies of the institutions affected. Contracts for a consideration having a value in excess of £50,000 will in addition require the consent of the Secretary of State. The forthcoming legislation will seek Parliament's approval to a measure having this purpose.
I shall also seek Parliament's approval for appropriate sanctions where consent has not been obtained in advance. With the disposal of land or interests in land without the consent of the Secretary of State, there will be a power of compulsory purchase with a right of recovery from the local authority of any compensation payable. In the case of contracts, including contracts for disposal, entered into without the consent of the governing body concerned or, where applicable, the consent of the Secretary of State, there will be a right of repudiation, and such repudiation will be deemed to be a repudiation by the relevant local authority, so that any liability in damages will remain with the relevant local authority.
I shall seek the approval of Parliament for these two measures to have effect from midnight tonight. This statement does not affect enforceable obligations entered into before midnight tonight.

Mr. Jack Straw: As the timing of the statement so exquisitely demonstrates, the Secretary of State's announcement has been motivated by nothing whatever to do with the needs of the education service. Instead, it has simply been dictated by the Government's blind poll tax panic. The right hon. and learned Gentleman comes to the House this afternoon not as Secretary of State for Education but simply as the Environment Secretary's subordinate.
The whole House will be delighted that the Secretary of State has at last noticed, after 12 years of Conservative government, that
we still lag behind our competitors in the participation of our school leavers in further education".


That is a major admission by the Secretary of State of 12 years of Conservative failure—12 years in which the share of Britain's national wealth devoted to education has fallen, while almost all our major competitors have invested more and have had far better results in their education and training services.
Is not it typical of this Government that, faced with the yawning education and training deficit between the United Kingdom and its major competitors, the only solution that Ministers can find is to set up a centralising bureaucracy, establish a new national quango and deny local people both a voice and choice? The Secretary of State could adduce no evidence whatever to back his claims of a lack of responsiveness to the needs of 16 to 19-year-olds among either further education colleges or local education authorities. The problems that colleges and LEAs have faced were imposed on them by central Government and central Government alone.
Does not the Secretary of State realise that the major problems in increasing opportunity and choice at 16-plus are educational, not bureaucratic? Does he realise that there is an urgent need, as Her Majesty's inspectorate said, to end the jungle of qualifications, with over 200 examining boards for those between 16 and 19? Does he realise that instead we must establish a coherent, unified system of 16 to 19 examinations? The statement said riot a word about that. Instead, the Secretary of State has blighted all chances of sensible reform of examinations for those between 16 and 19.
Does not the Secretary of State also understand that there is the widest support for setting clear national and local targets for improvement in participation rates for 16 to 19-year-olds, as the Labour party has proposed? That sensible reform, backed by both the Confederation of British Industry and the Trades Union Congress, has been rejected out of hand by the Secretary of State's friend, the Employment Secretary.
Will the Secretary of State confirm that, despite what he says, his proposals will place school sixth forms at risk and in financial limbo, with less financial support than sixth forms in further education colleges? What will be the position of both church schools with sixth forms and voluntary-aided sixth form and further education colleges? What guarantees does the Secretary of State give about the future of adult and community education, especially where that provision is contained within existing further education colleges?
Although one understands—especially in view of his record in the health service—the Secretary of State's profound contempt for those who are locally elected to represent their communities, and his desire to place all institutions under quangos appointed by him, what planning or strategic role will local education authorities have in respect of planning 16 to 19 provision?
Nothing has caused greater resentment or loss of efficiency in the education service or greater unpopularity for the Government than piling one hasty and impulsive change after another on the service. Has anyone told the Secretary of State that the last major changes in further education took effect only 11 months ago and have yet to be established? Those changes were made under the Education Reform Act 1988 and, in commending them to the House, the former Minister of State for Education and Science, the right hon. Member for Mitcham and Morden (Mrs. Rumbold), praised the work of local education authorities. Given the ghastly mess that the Government

have made in education and on the poll tax through impulsive decisions taken without proper consultation and consent, would not it be sensible for the Secretary of State to consult those who run 16 to 19 education, those in colleges and schools and the public, before seeking to ram these ill-considered and hasty proposals through the House?

Mr. Clarke: My hon. Friends and I have been working for some time on these further education proposals and I commend them to the House for education reasons. I have met principals of further education colleges who have pressed me to be allowed to have the independence from local government that we are now giving them. Our proposals will be widely welcomed in the world of education, especially by those in further education colleges, tertiary colleges and sixth form colleges which concentrate on 16 to 19-year-old provision.
The hon. Member for Blackburn (Mr. Straw) comes in as a little Sir Echo from our debate on the previous statement and tries to imitate his colleagues in their exchanges on the poll tax when he should be addressing the education issues that are involved. When he goes outside he will find that my proposals are welcomed by those in education whose advice he should heed.
Secondly, I am not taking anything under central control, but I am taking colleges out of local government control. The body that we are setting up is a funding council which will distribute the funds and will bear in mind quality that is assessed as I have described. It will otherwise leave the management of the colleges to themselves. Colleges will be free to spend the money and the funding regime will ensure that they increase the participation of students and improve their efficiency at the same time, exactly as the polytechnics have done.
That is modelled on the freedom that we gave to polytechnics in 1989. Polytechnics are not controlled centrally by me, although funds are distributed to them by a funding council. Polytechnics are brilliantly successful in increasing the participation of students in higher education, and we have seen 36,000 more students this year alone. They are at the same time increasing efficiency and maintaining excellent academic standards. Therefore, removing from local government control those responsible for higher and further education institutions which want to be entrepreneurial and to expand opportunities for young people is a good education policy which the hon. Gentleman should not oppose.
The hon. Member for Blackburn made rather strange remarks about funding having more to do with this. He knows that we spend a higher percentage of our GNP on education than do most of our competitors, and that spending per pupil in this country has gone up by 40 per cent. He was right in what he said about the jungle of qualifications for 16 to 19-year-olds. We are already addressing that with the help of the National Council for Vocational Qualifications which we have set up. My right hon. and learned Friend the Secretary of State for Employment and I are closely addressing that matter and some of the others that the hon. Gentleman mentioned. We shall shortly produce a White Paper setting out better opportunities for young people which will include further clarification of qualifications.
I have already said that I shall use my powers to protect sixth forms and certainly good sixth forms which are of benefit to the schools to which they are attached. Parents


would also like to have local choice of sixth forms. Voluntary-aided sixth form colleges will be affected by my proposals. They will acquire the new status and join the new sector and I have today written to people in the churches involved to set up a way to have discussions about the mechanics.
Adult education presently carried out and delivered by colleges will also be covered by the proposals and the funding arrangements that I have described. Details on that will be contained in the White Paper. My statement should be addressed by the hon. Member for Blackburn in his capacity as spokesman for the Opposition on education matters. If he addresses it objectively and uses educational judgments, he will welcome and commend my proposals.

Mr. James Pawsey: I hope that my right hon. and learned Friend will reject the unfounded allegations by the hon. Member for Blackburn (Mr. Straw).

Mr. Ian McCartney: On a point of order, Mr. Speaker. This is a serious point of order, not an attempt to interrupt the hon. Member for Rugby and Kenilworth (Mr. Pawsey).
A written statement was issued to hon. Members when the Secretary of State started to give details of his proposals. The Secretary of State said that from midnight tonight he would take certain action to prevent local education authorities from entering into arrangements with further education colleges. In the written statement issued to hon. Members, the Secretary of State says that he will not seek legislative powers to do that until the autumn. That seems to pre-empt a decision of the House in relation to the Secretary of State taking powers. Is it in order for a Secretary of State to implement proposals from midnight when he has no statutory right to do so and will not have such a right until the legislation is passed by the House in the autumn?

Mr. Speaker: I am concerned with what the Secretary of State has actually said, not with anything that may have been written.

Mr. McCartney: This is serious, Mr. Speaker. I am speaking about what is contained in the written statement that accompanied the oral statement by the Secretary of State. He has said that from midnight he is implementing proposals which will be contained in legislation in the autumn. As I have said, that pre-empts a decision of the House and I seek a judgment from you, Mr. Speaker, on the powers under which the Secretary of State proposes to do that. Is what he is doing ultra vires, because the House has not given him the necessary power?

Mr. Clarke: Further to that point of order, Mr. Speaker. What I have announced is well precedented. My statement had to contain details towards the end about what I proposed because I was announcing to the House that certain measures would take effect from midnight tonight and that I would later seek parliamentary approval for those steps. That was done when polytechnics were given independence and it is frequently done for changes in taxation and for changes in regimes of this kind. It is to make sure that from midnight tonight local authorities will not be tempted to strip assets, sell land or enter into contracts.

Mr. Straw: Further to. that point of order, Mr. Speaker.

Mr. Tony Banks:: We still have six hours to go.

Hon. Members: Oh!

Mr. Straw: As my hon. Friend knows, I am stone deaf in one ear and therefore do not have a clue about what he said.
Further to that point of order, Mr. Speaker. My hon. Friend the Member for Makerfield (Mr. McCartney) raises an important issue. The Secretary of State tried to wriggle out of it by saying that his action is well precedented. It is precedented only by actions of this Government when they introduced retrospective legislation.

Mr. Clarke: Taxation.

Mr. Straw: This is not about taxation. The suggestion that local authorities will asset-strip further education colleges to which they are committed and have expanded and are up and running is absolutely preposterous. The right hon. and learned Gentleman should withdraw that. It shows his hostility to local education. Will you confirm, Mr. Speaker, that no parliamentary approval exists for the Secretary of State's proposal?

Mr. Speaker: It is a matter for the Government. If they are found to be ultra vires, it will be a matter for the courts, but it is certainly not a matter for me.

Mr. McCartney: Further to that point of order, Mr. Speaker. I am not trying to delay matters but this issue is vital to the good running of the House and to you, Mr. Speaker, as the defender of the House. The Secretary of State has had two opportunities to indicate what powers under what Education Act he is taking upon himself to carry out certain actions after midnight. Clearly, he has no precedent in law. I do not want to see the Secretary of State before the courts next week arguing with education authorities about their proper and rightful duties in respect of colleges. Perhaps we need an adjournment and some discussion behind the Chair about how to proceed in this matter or we will find ourselves——

Mr. Speaker: Order.

Mr. McCartney: rose—[HON. MEMBERS: "Sit down."] What a bunch of louts. I apologise, Mr. Speaker.

Mr. Speaker: I must say to the hon. Gentleman that what the Government intend to do is a matter for them. I repeat what I have said to Front-Bench spokesmen that whether the matter is ultra vires is a matter for the courts, not for me.

Mr. Tony Banks: Jack-booted thugs.

Mr. Speaker: We would be well advised to keep the temperature down. I do not know who said that, but I shall allege that I am temporarily deaf.

Mr. Pawsey: I hope that my right hon. and learned Friend the Secretary of State will reject the unfounded allegations by the hon. Member for Blackburn in the same way as the House will reject the vote of confidence motion tabled by the Leader of the Opposition. Will my right hon. and learned Friend confirm that when we set colleges of


further education free from local education authorities they will be able to blossom in exactly the same way as polytechnics?

Mr. Clarke: I have certainly been assured of that by many of the principals of further education colleges who have been pressing us to make precisely this change. Given their head and the right financing regime, they will have every incentive to improve their efficiency, extend the range of their courses and, most importantly, attract an ever-rising proportion of our 16-year-olds into further education.

Mr. Matthew Taylor: Once again the Secretary of State has managed to remove an element of local democracy without, as he admitted himself, tackling the problems of confusion or underfunding in this sector. Can he confirm that local people from whom power has been removed will see no financial benefit, as it is his intention to achieve the change entirely by removing Government grant without allowing any fall in local spending? Conservative Members who have argued for the centralisation of education are now faced with a measure of that centralisation, hut with none of its expected benefits.
Can the right hon. and learned Gentleman explain to local people how they are to fare in future? In Truro, for instance, there is a proposal for a tertiary college on which we had expected a decision by the Minister next week. How are we to proceed? Is everything to come to a grinding halt until the Minister has published the White Paper and passed the legislation?

Mr. Clarke: The management of local further education colleges and polytechnics was not usually directly affected in the past by local democracy. They were not at the heart of the red meat of local politics—indeed, the sector was sadly neglected. Tertiary education achieves a great deal, but it has never attracted the degree of attention that it deserves. The test of whether it is anti democratic is to talk to some of the principals of the polytechnics. So far I have not found any lecturer in or principal of a polytechnic—including a number of the classic left-wing, bearded variety—who believes that it is a good idea to go back to local government control. Such people have been liberated by the change and have acquired, not lost, freedom. That is what will happen to colleges under my proposals. In the White Paper we shall deal with the details of how new colleges are to develop, but I expect that we shall adopt a system in which the funding council will make proposals of that sort to me.

Mr. David Madel: Is my right hon. and learned Friend looking to members of the training and enterprise councils automatically to become governors of colleges of further education? Will he confirm that the choice facing an upper school now is to stay with the local education authority, to opt to become grant maintained, or to opt to become part of a college of further education?

Mr. Clarke: The answer to the first point is certainly yes. I would expect a member of the local TEC invariably to become a member of the governing body of these institutions. We are not talking about opting for the new status, because at the moment schools under local authority control can opt for grant-maintained status—although curiously further education colleges do not have

that choice. So they do not have a natural constituency that we can ballot; their populations are more transitional; so the parent body is not so closely connected with them.
My announcement today means that all further education colleges, all tertiary colleges and all sixth form colleges will transfer to the new sector and be independent of local government from April 1993.

Ms. Clare Short: The real danger of the Secretary of State's proposals is that they will entrench the division between sixth form FE colleges and sixth form colleges. The flaw in our secondary education system has always been the divide between the academic and the vocational, and these proposals will deepen that divide. We need to train all our young people together in a system in which vocational work and academic work are equally respected. This change will be destructive and will further entrench the divide.

Mr. Clarke: I assure the hon. Lady that I share her concern not to deepen that divide. My colleagues and I are working to ensure that vocational education acquires the same status as academic education, so that there are no artificial divisions between them. Sixth form colleges will enter the new sector as a result of my announcement. They tend to concentrate on traditional academic courses, so many of the young people in the colleges that I am talking about will study, for instance, for A-levels; but many others will be doing vocational courses. I do not believe that she is correct to suspect that the proposals will widen the divide.

Mr. Alan Haselhurst: Will not my right hon. and learned Friend's statement represent a further enhancement of this important sector of education? Might it not also be an important step towards ensuring the universal involvement of 16 to 19-year-olds in some form of education and training?

Mr. Clarke: In our forthcoming White Paper we shall deal with the whole issue of how to increase participation by all 16 to 19-year-olds in some form of education or training. We shall set ourselves the aim of greatly increasing such participation. I share my hon. Friend's aim, and I trust that our White Paper will measure up to his expectations.

Mrs. Rosie Barnes: Although I am persuaded that further education colleges will be better off independently funded than subject to the vagaries of local authority control, does the Secretary of State agree that there is a great danger in the proposals that local education authorities reconsidering the structure of their sixth form and 16 to 19-year-old provision will automatically turn their backs on the tertiary college or sixth form college solution in order to retain control over the education of this age group?

Mr. Clarke: If there is a risk of that it will show that the local authority in question is motivated more by a desire to keep its empire intact than by a desire to improve educational opportunities for young people in its area. I rather share the hon. Lady's fear that such councils exist—I encounter such attitudes frequently when I receive applications for grant-maintained status from schools. We shall have to consider ways in which the new funding council can make proposals to us for opening new colleges


in certain areas. A council that was neglecting to create more choice in its area might find that the new sector was beginning to offer parents some choice in that district.

Mr. Andrew Rowe (Mid-Kent): I hope that I did not detect in one of my right hon. and learned Friend's answers that he is falling into the trap of beardism—that would be unfortunate and discriminatory. As a recent governor of a college of further education, may I say that it was crystal clear that it would be extremely desirable to do exactly what my right hon. and learned Friend has done—and that I welcome it. When he looks into the funding arrangements, will he ensure that the rundown state of much of the capital stock of these colleges is taken into account?

Mr. Clarke: I am grateful for my hon. Friend's support, which is based on his experience. I am sure that he is not the only governor to have thought that colleges of this sort have been comparatively neglected by local authorities that attach far higher priority to other parts of the education system.
I take note of what my hon. Friend says about capital. Many of these colleges' revenue and capital have been comparatively neglected; we shall consider capital arrangements and probably again use the funding council as our agent to distribute the necessary capital investment.

Mr. Peter Hardy: Will the Secretary of State hesitate before proceeding rapidly on this course until he has considered the view that many people, bearded or otherwise, may express? It is that there is likely to be an excess of centralisation and a greater degree of bureaucracy. Whatever he may say, there will certainly be great anxiety in successful sixth forms. Will he subscribe to the view that education has suffered in recent years from undue turmoil and an excess of dogma?

Mr. Clarke: The universities receive their funds from the Universities Funding Council and are not centralised under the control of central Government. The polytechnics and higher education colleges receive their funds from a funding council and are not under my control or over-centralised. The same will apply to the new sector. The desirable pattern for education is not detailed control by either local or central government. More power should be devolved and delegated and responsibility for and control over funds go to those who work in the institutions themselves and serve on their governing bodies. That is the pattern that we are following.
The hon. Gentleman says that we should not rush into it, but it is necessary to make an announcement and to outline the provisions that will come into effect from midnight tonight simply to ensure that certain local authorities do not start apostating. We have much experience—[Interruption.] The hon. Member for Newham, South (Mr. Spearing) is protesting but his hon. Friend the Member for Newham, North-West (Mr. Banks) should know that we had to take that measure when the Greater London council began to take similar steps immediately after we announced that we would abolish it.
We are still sorting out problems in the case of the polytechnics. Only a week ago I met a principal who said that his local authority had accepted that the polytechnic

now owned the building but still insisted that it owned the grass in front of the building. Such disputes exist throughout the country. Had we not made such arrangements, I am sure that great pressure would be put on many colleges to enter into long-term contracts, binding them to their local authority, and their assets would be clawed back into local authority control. All the tricks of the trade, which many local authorities know only too well, would be used to keep their bureaucratic empires intact.

Mr. Harry Greenway: I welcome my right hon. and learned Friend's proposals. Ealing's higher education college is doing well independently of the local authority, which has been a perfect nuisance to it in the past.
Will my right hon. and learned Friend the Secretary of State follow through the logic of his statement and consider the position of school sixth forms? Would not it be right for high schools and secondary schools to have arrangements made for them similar to those that he has announced for non-advanced and advanced further education and tertiary colleges?

Mr. Clarke: I am sure that the opinion of those involved with Ealing higher education college is shared by everyone in higher education colleges that have been given their independence. Whereas at present we are offering to secondary schools, including those with sixth forms, the opportunity to seek grant-maintained status, the first step is that the local management of all schools will be placed in the hands of the governors and the head teachers shortly, with 85 per cent. of the schools' budgets under their control by 1993. Beyond that, the best will rapidly move to full grant-maintained status, with 100 per cent. of their budgets under their control and comparative freedom and autonomy from local authority control.
Thus, a parallel course is already set out. The pace at which schools are choosing grant-maintained status is accelerating at a remarkable rate, even in the few months that I have been in office.

Dr. Dafydd Elis Thomas: Will the Secretary of State accept my party's welcome of the proposal for a White Paper on the 16 to 19-year-old sector? Will he also accept that there will, indeed, be wide-ranging support from those who work in the further education sector in England and Wales—similar proposals will be made by the Welsh Office—and that the funding council will provide an opportunity to combine central funding with flexibility of institutional control in the locality rather than control by the aldermanic tendency, which still exists in too many local authorities? In what ways does the Secretary of State intend to enhance the relationship of adult and continued education with the further education sector? What relationship does he see, if any, between the new funding council and the Polytechnics and Colleges Funding Council and the Universities Funding Council to improve access from further education to the rest of higher education?

Mr. Clarke: First, I am grateful for the hon. Gentleman's welcome. He was a lecturer in his time, although I think it was in higher education, so he is knowledgeable on the subject. His opinion will be shared by professionals in education. As he rightly anticipated, my right hon. Friend the Secretary of State for Wales will


make a statement because there will be a separate Welsh funding council and arrangements for Wales which I am sure he will welcome.
Secondly, the hon. Gentleman asked about adult education and access from further to higher education. Those matters are important and we are working on them as part of our White Paper. We shall address those problems directly when we return with our White Paper and our proposals for opportunities for young people of that age across the board.

Mr. John Bowis: Is my right hon. and learned Friend aware that his statement will be widely welcomed in the further education sector, not least because it has been calling for precisely that measure? Those who work in that sector will not understand the Labour party hostility to the proposals. Does my right hon. and learned Friend agree that one reason why his proposals are right is that the Government's funding of further education has not always been passed on by local education authorities to those institutions? At long last, it will go to them directly. Will he confirm that this is the clearest possible sign of the Government's commitment to the further education sector and its role in education and training?

Mr. Clarke: I am grateful to my hon. Friend. He is right—we have had experience of approving capital for projects in further education, only to discover that when the local authority has obtained the capital approval for such projects the money was not spent in that sector. That shows the practical application of the way in which many colleges have been neglected vis-à-vis the schools sector. I agree that many people in further education will not understand why the Labour party has a blind commitment to keeping up the widest level of local authority bureaucracy and is instinctively hostile to a move that has been demanded by most people in further education for many years.

Mr. Terry Davis: How can students and staff have any confidence in their courses in view of the experience of many people now on employment training courses who are being given less than a week's notice of the termination of their courses, ahead of time, as a result of the advent of training and enterprise councils, which the Secretary of State wants to make responsible for running colleges of further education?

Mr. Clarke: My right hon. and learned Friend the Secretary of State for Employment assures me that arrangements are being made for people to continue their courses. The introduction of the TECs, which I warmly welcome, is not having the consequence that the hon. Gentleman fears.

Mr. Andy Stewart: My right hon. and learned Friend is well aware of the valuable service of the Workers Education Association, not only in Nottinghamshire but in our rural communities. As he also knows, it had a raw deal from Nottinghamshire county council this year as regards funding. Will he assure me that it will be taken into consideration under the new funding arrangements?

Mr. Clarke: I have every possible reason for agreeing strongly with my hon. Friend's criticisms about Nottinghamshire county council's disgraceful behaviour this year. As I said, my announcement comprises certain

responsibilities for adult education and we shall outline them in more detail and explain the funding regime when we produce the White Paper. The funding of adult education, especially that which is closely related to career opportunities for people of that age, must be protected. We shall take it into account when drawing up our new arrangements.

Mr. Win Griffiths: When opening his statement, the Secretary of State emphatically said that the arrangements were for England. In replying to the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas), he said that the Secretary of State for Wales would make a separate statement on further education. However, in the order of business, I understood that the statement was on local government finance. Are we now being told that the Welsh statement will be on poll tax mark 2 and further education in Wales?

Mr. Clarke: Wales and Scotland have devolved government. As an English politician, I can never understand the constant controversy on devolution in both the other countries on the United Kingdom mainland. My right hon. Friend the Secretary of State for Wales is Education Minister for Wales and my writ does not run there. Similarly, my right hon. Friend the Secretary of State for Scotland deals with education in Scotland. Their statements will cover both local government finance and further education.

Mr. Barry Field: Will my right hon. and learned Friend point out to the House, especially to the Opposition, that on 11 June last year I brought a delegation from the Isle of Wight art and technology college to see the Minister of State, Home Office, my right hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold)? The college principal and the governor-chairman urged my right hon. Friend to take that action because they were so fed up with the political shenanigans of the Liberal Democrats who have continually cut the budget and politicked with the courses at the college of art and technology. My right hon. and learned Friend's statement will be widely welcomed by the tutors, governors and students on the Isle of Wight. Taken together with the training enterprise councils, it marks a breathtaking revolution that will do us well in 1992.

Mr. Clarke: I am grateful to my hon. Friend for helping to mobilise representations to the Government which led us to take that decision. Several other such representations by my hon. Friends led us to our conclusions. As my hon. Friend made clear, had we not experienced difficulties with the community charge, and were we not changing the basis for local government finance, I am sure that I should have wanted to come before the House with a statement to rescue further education from the vagaries of people such as the Liberal Democrats on the Isle of Wight.

Mr. Tony Banks: May I remind the Secretary of State that at 3.30 pm the Secretary of State for the Environment announced major changes in local government structures, and said there would be a consultation period. However, within three hours, the Secretary of State for Education and Science comes along to the House and makes announcements that will radically affect local government structures and responsibilities. Education is one of the most important local authority functions. How dare he do that and talk about democracy?


He comes here like Hitler with a beer belly and says that changes will take place. Exactly what consultations are taking place with local education authorities on those proposals? As he is saying that legislation will be presented to the House in the autumn, does that mean that we are not going to have a June election?

Mr. Clarke: I am confident that educational opinion will support me, and any consultations carried out by the hon. Gentleman would confirm that. I prefer to base my judgment on the educational interests of colleges, not the advice of the hon. Gentleman, who clung like a limpet to his little chairmanship and little power in that completely useless organisation the Greater London council. It was a big car and a big platform for making statements, but he had no powers or responsibilities. Quite a few other spheres of local government would do well if subjected to the sort of scrutiny that my right hon. Friend the Secretary of State for the Environment has said that he will give local government in the near future.

Mr. Richard Tracey: I can fairly confirm the attitude of one further education college to my right hon. and learned Friend. Recently, the principal and a majority of the governors of Kingston college of further education said that they thought they had been ill done by when Kingston polytechnic was allowed to become free-standing.
May I press my right hon. and learned Friend further on the subject of adult education? He will realise that much of it is conducted in the same buildings as further education. Will the whole or part of further education move out of local education authority control? What about accommodation?

Mr. Clarke: The colleges will continue to make provision for adult education, and the extent to which they do so has been encompassed by my announcements today. We will in due course address the detail, which will certainly include the funding arrangements for that essential part of adult education, preparing young people for their careers. I agree that it forms an important part of our proposals; we shall give more details in the White Paper.

Mr. Nigel Spearing: Does not the Secretary of State for Education and Science understand that these measures will be seen as accelerating the disintegration of the unitary system of education, which was introduced by a national Government and agreed to by all parties in the House in 1944? Will not it also mean that there will be three different types of institution competing for the education of 16 to 19-year-olds? What is the approximate proportion of local education authorities' current expenditure on education that the Secretary of State expects to be transferred by these measures? Do not the proposals mean that all existing sixth form colleges will achieve grant-maintained status by law? Were these proposals contained in the last Tory election manifesto?

Mr. Clarke: I will not debate the history with the hon. Gentleman, but the system of education that grew up did so rather by accident. The Education Act 1944 did not even impose a duty on local education authorities to provide schools. It was a matter of chance that they grew

up as they did. We reached the position where every school was under the detailed, day-to-day management of local authorities—some good, some not so good and some bad. My preferred method of management is one that distributes the money by a fair method and retains some ability to monitor standards, but puts the day-to-day responsibility firmly in the hands of the principal, head teacher or governing body——

Mr. Straw: That is there already.

Mr. Clarke: That is now being described as "fair" by the hon. Member for Blackburn, who has gone through one of the quickest conversions on policy for a long time.
As for the proportion of local government spending, £2 billion will be affected by my announcement today. Off the cuff, I believe that the total local government spending on education is about £17 billion. Those who have successfully reached the right standard according to the school curriculum will rapidly be able to work out what percentage that is.

Mr. Ian Taylor: When making this welcome statement my right hon. and learned Friend was right to ignore the advice of the hon. Member for Newham, North-West (Mr. Banks), whose asset-stripping instincts were in keeping with the old activities of the Inner London education authority, which laid to waste academic standards throughout London.
The statement is particularly welcome to me. My right hon. and learned Friend knows that Esher sixth form college in my constituency was already considering applying for grant-maintained status, which shows that the system has been running longer than the hon. Member for Blackburn (Mr. Straw) suggested. That sixth form college was worried that it might have been alone, if it were one of the first and only ones to have applied for grant-maintained status. The proposals give a structure to post-16 education which is extremely welcome. I hope that my right hon. and learned Friend will now turn his attention to items such as inter-authority transfers, which sixth form colleges thought worked badly against them when attracting pupils from out of their areas.

Mr. Clarke: My hon. Friend's sixth form college will no longer be unique in its independence, but I am sure that it will be one of the best in the new sector. The problem of inter-authority transfers and their financing will disappear almost completely. The financing of the colleges will depend, first, on core funding, based on planning and judgments of quality by the funding council, then on their success in attracting young people from wherever in the surrounding area to come to good quality courses. That is a much better way of financing the expansion of colleges such as that in the constituency of my hon. Friend the Member for Esher (Mr. Taylor).
I am grateful to my hon. Friend for reminding me of the Labour party's passionate defence of ILEA, that singularly useless and unlamented education body that used to control London. The only Labour education policy is the defence of bureaucracy and the dead hand of local government on the day-to-day management of schools.

Mr. Dennis Skinner: Why does not the Secretary of State answer the question put to him by my hon. Friend the Member for Newham, South (Mr. Spearing) about whether the proposals were contained in


the Tory party manifesto at the last election? The Secretary of State has no mandate for what he is doing here today. There is something sinister about a Government who take power away from people in local democracy and put it under the Government's jackboot. Unlike my hon. Friend the Member for Newham, North-West (Mr. Banks), I think that the Secretary of State is like Mussolini, who was Hitler with a beer belly.

Mr. Clarke: I look forward to the next Labour party manifesto to see whether it contains a commitment to hand back polytechnics and colleges of higher and further education to local government control. If such a promise appears in the next Labour party manifesto, I promise the hon. Gentleman that he will face deputation after deputation of lecturers and pupils demanding that the policy should not be carried out. It is symptomatic of the way in which many of the left-wingers with whom I have to deal in local education authorities behave. When their arguments fail, they resort to personal abuse, a level to which the hon. Member for Bolsover (Mr. Skinner) has finally sunk.

Mr. Ian Bruce: May I ask my right hon. and learned Friend about administrators and advisers who exist within the education departments of county councils? How will he ease the passage of reducing their numbers, which must clearly be done if their responsibility is taken away? After the removal of polytechnics from the control of education authorities, how many advisers and administrators were saved? That is a serious question and I hope that my right hon. and learned Friend will answer it. I know that Dorset county council already has some worries about losing various schools that want to opt out and reducing the burden of those administrators. Nothing will be saved unless those administrators move elsewhere or sell their services, thus taking the burden of expense away from the local taxpayer.

Mr. Clarke: My hon. Friend makes a valuable point. The changes that we have made, and the steady change to enabling authorities, gives local authorities the opportunity greatly to reduce their central staff, thereby reducing the burden on the community charge payer. I cannot give an off-the-cuff answer on Dorset, but the numbers of advisers should be reduced as a result of the decision that I have announced. Local education authorities are large enough to redeploy those people as they move from those duties. Far too many local authorities do not adequately reduce their central administration, even when they lose responsibilities. I shall not comment on Dorset—it is far away—but my local authority shows signs of having grown like Topsy for many years. Nottinghamshire combines extravagance and sometimes incompetence with poor supervision of its education services.

Mr. Derek Fatchett: Does the Secretary of State recognise that the most important element of his statement is the acknowledgement that after 12 years of this Government we still lag behind other countries in education and training for 16 to 19-year-olds? Does not that show the Government's failure in providing for our young people?
Does the Secretary of State recognise that his statement will cause much anxiety among schools that have sixth forms? How will he use what he called his "additional powers" to protect and secure the future of sixth forms?
What is likely to happen to free-standing adult education centres? The Secretary of State did not refer to adult education centres in his statement, but in response to a question he said that they will be included under the funding council. Is that the intention, is the right hon. and learned Gentleman mistaken or must he obtain that information from the Minister of State? If so, will he give it to the House?
Does the Secretary of State recognise that adult education, which is important to thousands of people, will be put at risk by the statement and by the Government's approach to funding?
All hon. Members recognise the need for a statement on an integrated approach to the education and training of 16 to 19-year-olds. It would have had more credence if the Secretary of State had made that statement first and the institutional reforms had flowed from it, but the education arguments are to be advanced second and the institutional arguments to be made first. That is final confirmation and evidence that the statement is not about education but about the chaos that has been created by the poll tax.

Mr. Clarke: The proportion of our young people in higher and further education is increasing dramatically. I agree that we are behind many of our competitors, but we are catching them fast and making up for past deficiencies in the service. The number of students in polytechnics and higher education colleges is 54 per cent. higher—more than half as many again as when the Government took office.
I expressed the importance that I attach to keeping good sixth forms and to giving parents the choice of a good sixth form where possible. My existing powers will enable me to protect sixth forms because any proposal to open or close one will continue to need my consent and because we can bear in mind the needs of sixth forms when constructing the standard spending assessments in the equalisation measures necessary to distribute grants to local authorities. We can thereby consider the weighting to be given to post-16 pupils.
I did not say that adult education colleges—free-standing institutions that deliver solely adult education—would be covered by my statement, but that the adult education responsibilities of an FE college would be considered. The details of the provision for adult education were addressed in the White Paper, and nothing that I have announced will diminish the opportunities for adult education.
The hon. Member for Leeds, Central (Mr. Fatchett) came near to welcoming the proposal of my right hon. and learned Friend the Secretary of State for Employment and myself for a comprehensive statement of policy on 16 to 19-year-olds. He is quite wrong in believing that my announcement today is inconsistent with such a statement. As I keep pointing out to him and to the hon. Member for Blackburn, they are obsessed with the structures. It is extraordinary that they are most shocked by the idea that colleges should be taken away from their friends in local government. The people about whom we are all concerned will benefit from our giving colleges the independence that I have announced today.

Local Government Review (Wales)

The Secretary of State for Wales (Mr. David Hunt): With permission, Mr. Speaker, I should like to make a statement on local government in Wales.
The Government have already explained to the House our new arrangements for further reductions in community charges. The people of Wales will be delighted to know that, although average charges in Wales were substantially lower than elsewhere in Britain, I have been able to secure exactly the same reductions as those offered to English and Scottish charge payers: Welsh charging authorities will reduce all charges by £140, and Wales will receive £300 million in additional resources.
The remarkable consequence is that, taken with my announcement last January on the community charge reduction scheme, the average charge in Wales before the award of community charge benefit will be £95. As nearly £1,170 per charge payer will be spent by Welsh local authorities in the forthcoming year, it is an astonishing good deal for Wales.
We abolished domestic rates and we intend, from the earliest possible moment, to abolish the community charge and replace it with a new local tax that will be linked to two essential elements of a household—the number of adults, and the value of the property. I propose to consult in Wales on the basis of that proposal. I should make it absolutely clear that I am prepared to consider a system whereby the balance between the two elements—the property element and the element attributed to residents—may be different in Wales from that elsewhere. That balance, and other matters, will be the subject of consultation. I look forward to receiving the views of hon. Members, among others, and I very much hope that the Opposition can be persuaded to make a constructive contribution to the debate.
I have received representations from Opposition Members and from the local authority associations that we should move towards a system of unitary authorities in Wales. I can see some advantages in such a structure, but before I could commend any new system to the House I would need to be satisfied that whatever is proposed represents the best deal possible for the people of Wales.
In reaching conclusions on that matter, I must pay particular regard to the views of the local authority associations. Both associations have pressed on me the case for unitary authorities, but as yet there is no agreement between them on the appropriate size or number of authorities. I have suggested that they should seek to establish common ground on the future structure of Welsh local government. I am therefore pleased to hear that they will meet on 5 April to consider that further, and I have informed the chairman of each association that I shall not reach final decisions until I have had the benefit of further discussions with them following that meeting.
I should, however, like to make two further points. First, community councils play an important role, especially in rural areas, and I shall need to consider the merits of any proposals for change. Secondly, I shall consult on how the decision-making process of local authorities can be improved. I shall try to build on the excellent work that Welsh authorities are undertaking with the efficiency initiative.
We must look at the problems of finance, functions and structure together. No institution, even one as important as local government, can remain unchanged for ever. I shall consider whether the present range of local government functions is appropriate and what should be the balance between central and local responsibility.
In that context, I can tell the House that I intend that the further education and sixth form colleges in Wales should become independent from their local authorities from 1 April 1993. The legislation which we will introduce for Parliament's approval will provide for the colleges to become independent corporations, owning their own assets and employing their own staff.
The colleges play a vital role in producing the well-educated and well-trained labour force which Wales needs. They will work closely with the training and enterprise councils. The colleges could, however, increase their contribution still further by recruiting more young people to their courses. The proposals which will be set out in the White Paper to be published shortly will give further details of how that can be achieved.
I intend establishing a Wales funding council through which the colleges will be funded. The council will be appointed by, and be responsible to, me. It is my intention that the land, buildings and plant currently used by the colleges should be vested in them on incorporation. The arrangements which my right hon. and learned Friend the Secretary of State for Education and Science has said will be included in the legislation requiring local authorities to obtain specific consent for the disposal of assets currently used by the colleges will apply to local authorities in Wales; so too will the measure he referred to preventing local authorities from entering into contracts which bind the colleges beyond 1 April 1993. As in England, these measures will be effective in Wales from midnight tonight, subject to Parliament's approval of the legislation.
Further details of these measures are in the statement which my right hon. and learned Friend the Secretary of State for Education and Science placed in the Official Report today. My Department will write to all local education authorities in Wales to explain how those measures will be applied.
It is now in the interests of the whole of Wales that we create a lasting framework for local government to provide high-quality services effectively and efficiently. That is a goal to which we can all aspire.

Mr. Barry Jones: The Prime Minister said on Tuesday that we would get the details today, but the outcome of the Government's four-month review is a statement of dithering, delay and indecision. We still have no details or answers. Today's statement simply leaves Wales with many questions. How will the new system work? Will it be fair? How much will it cost? Will it improve local accountability? Will it improve local democracy? Will it improve the standard of local services? People in Wales do not just want a reduction in their bills; they want the poll tax to end. The statement will not give them that. In effect, the poll tax lives on.
Does the Secretary of State remember criticising the Labour party at the Conservative party's annual conference when, referring to the Labour party, he said:
The party that loves tax wants two taxes to replace one, a twin tax torture for local people and a double disaster for responsible spending"?


Does not the statement in some respects show that the right hon. Gentleman has gone for a triple tax torture—a property tax, a 2·5 per cent. VAT increase and a poll tax? Again, the poll tax remains for the people of Wales.
The right hon. Gentleman boasts of the huge sums of money which he is throwing at the problem of the poll tax, but are not the Government bribing the people of Wales with their own VAT money? Is it not incredible to hear the right hon. Gentleman seeking plaudits for lessening the poll tax pain when he himself approved that hated tax? Did he not gain promotion to Cabinet by his devoted service to the poll tax? Never before in the history of local government in Wales has a Minister presided over such chaos.
Swansea city council has sent out 145,000 poll tax demands; Ceredigion council has filled its vaults with tens of thousands of printed, and now useless, demands; and our capital city of Cardiff has sent out its poll tax demands. This shambles invites nothing but contempt from the dedicated professionals in the Welsh local authorities, and the Secretary of State must carry responsibility for this chaos. I know of no Welsh Office Minister who has presided over such a humiliation. Is not an apology owed to the people and councils of Wales? I ask the right hon. Gentleman to give that apology here and now.
The right hon. Gentleman mentioned structure and functions. He proposed consultation with local authority associations. That will create bitterness. I issue the right hon. Gentleman a warning: do not tamper carelessly with our education service. Does the right hon. Gentleman know that parents and teachers are weary of the upheavals and constant ideological changes? His proposal to make sixth form colleges independent of their LEAs is lamentable.
The right hon. Gentleman mentioned the Opposition parties and consultation. The Labour party is interested in co-operation, but on the basis of ruling out the poll tax now and ruling in an efficient system of property tax, charged according to the ability to pay. The right hon. Gentleman's statement does not change the position one jot. Does he truly believe in consultation? For example, did he consult with the LEAs on sixth form colleges, or is it a diktat?
The statement represents the final act of a Government gripped by poll tax panic, ready to throw local government into chaos in one last desperate bid to save their political skin. It will not work and it will not wash. To use the Prime Minister's phrase, it is a "bogus sham".

Mr. Hunt: I wish to move swiftly to answer seven points. First, there is a paradox in what the hon. Gentleman said. On the one hand, he accused me of delay and, on the other, he said that I acted too speedily and was arrogant. If he will reflect, he will see that the people guilty of delay are on the Labour Benches—they are still failing to publish details of their proposals.
Secondly, the hon. Gentleman said that we now have two taxes to replace one. He quoted what I said. I was referring to the marvellous document "Local Services, Local Choices, Local Tax: Labour's approach to the Poll Tax". That document states:
A combination of a reformed property tax and a local income tax would bring equity, flexibility, accountability and stability to local government finance.
The document is dated September 1988. I do not know whether the hon. Gentleman wrote that, but he is just the sort of person to whom I am referring.

Mr. Barry Jones: Fair rates?

Mr. Hunt: The hon. Gentleman now refers to the Labour party's fair rates document. That document, entitled "Fair Rates: Labour's Alternative to the Poll Tax", is one of 67 different documents and statements from the Labour party that I have had the privilege of seeing in the past few years. It says:
The existing rates registers will provide a quick and convenient means of getting rid of the poll tax.
Fine. So what does the Labour party think about rates? [HON. MEMBERS: "Answer the question."] I will answer all the questions, but I want the hon. Member for Alyn and Deeside (Mr. Jones) to reflect on this. A news release issued by the Labour party's press and publicity department has fallen into my hands. On Saturday 20 September 1980, Neil Kinnock spoke at Pontllanfraith, Gwent. [HON. MEMBERS: "Who?"] The news release says—[HON. MEMBERS: "Answer."] I will answer the points but Opposition Members should not try to drown my remarks. They should listen to the words of their leader.

Mr. Win Griffiths: On a point of order, Mr. Speaker. Earlier this afternoon you intervened when a Scottish National Member used the word "Thatcher", and insisted that the proper nomenclature be used. But you have now ignored a similar instance. I ask you to rule on it.

Mr. Speaker: If I did that, I was in error. I must have been thinking of something else. The Secretary of State must refer to the right hon. Gentleman by constituency.

Mr. Hunt: Despite his delaying tactics, I ask the hon. Member for Bridgend (Mr. Griffiths) to listen to what was said by his right hon. Friend the Leader of the Opposition, who criticised my right hon. Friend the Secretary of State for the Environment for increases in
the most unjust of all taxes".
What tax does the right hon. Gentleman describe as the most unjust of all—"Local rates", the very system that the Labour party proposes to use,
which take most from those who can afford least.
Perhaps the Leader of the Opposition will eat his words. [Interruption.] Opposition Members ought to listen. The Leader of the Opposition will either have to eat his words or come up with yet another policy.
The hon. Member for Alyn and Deeside, describing my proposals, which are one tax, accused me of bribery. I apologise here and now for the record amount of extra money that I have won for Wales in the resources that I am able to announce to the House.
The hon. Gentleman's fourth point was that I had created chaos because of the present billing procedures. After ringing round all the authorities, we have discovered that only 13 of the 37 charging authorities in Wales have started billing. I make it absolutely clear here and now that the Government will provide any additional costs that our announcement has necessitated, and I hope that the hon. Gentleman will join forces with the Government in pushing through legislation as quickly as possible to bring about a reduction of £140.
The hon. Gentleman then said that independence for further education colleges was a lamentable proposition.

Mr. Barry Jones: Sixth form colleges.

Mr. Hunt: For further education and sixth form colleges.

Mr. Jones: rose——

Mr. Hunt: No; I will answer the hon. Gentleman's question. If the hon. Gentleman's question related to sixth form colleges, I am quite happy to assure him——

Mr. Jones: Consultation?

Mr. Hunt: I shall come to consultation in a moment, but I want to answer one question at a time. Sixth form colleges and further education establishments will welcome what I have said.
We have not consulted on the proposals yet because it was right that I should come to the House to announce them first. The hon. Member for Alyn and Deeside has been in Neath this week—I am not sure why. He will hear rejoicing in Neath that Neath college now has independence. If he looks at the proposals in the round, I am sure that he will realise that there is general acceptance. I only wish that he had not missed the opportunity to consult me.

Sir Anthony Meyer: I never thought that I would live to see the day when the Labour party would complain about the sums of money being made available to ease the plight of the people of Wales. Is my right hon. Friend aware that the Labour party is now totally alone, sulking in the corner? My right hon. Friend will understand if I express a certain quiet satisfaction at today's events. Is my right hon. Friend aware that the people of Wales know that they have a Secretary of State who has fought valiantly to obtain for them—against all expectations—as large a reduction in poll tax as the poll tax payers in England have had, even though they started from a much higher base? They are extremely impressed with the flexibility and sensitivity to Welsh susceptibilities that my right hon. Friend has displayed in his consultation process and in his approach to the problem generally.

Mr. Hunt: I much appreciate my hon. Friend's generous remarks. I wonder whether the hon. Member for Alyn and Deeside and a Labour Government would have succeeded in ensuring that 92 per cent. of local authority spending was met by aggregate external finance.

Mr. Alex Carlile: I thank the Secretary of State for meeting my hon. Friends and me in consultation some days ago. I warmly welcome the commitment to unitary authorities, which will benefit Wales, and also the decision to consult on how that should be achieved. I also urge the Secretary of State to give community councils in Wales more responsibility. They should be obliged to take those responsibilities and should not be allowed to opt out of doing so, because they have a considerable contribution to make.
Will the Secretary of State explain to a puzzled Welsh population why he—the person who, just over a year ago, described the poll tax as being central to the vision behind which all Conservatives could unite—has now changed his mind? Could it be that he stopped at Ribble Valley for a cup of tea on his way to Damascus? In particular, will he explain why he rejected the notion of a local income tax, which all those Welsh Members who took the trouble to meet him were united in recommending?
Will the Secretary of State join me in praising Powys county council for its considerable success in creating

Coleg Powys, which is an excellent college of further education, and will he assure us that that institution will continue—albeit perhaps under other governance?
Finally, will the Secretary of State assure the House that he will do his best to preserve the good sixth forms and comprehensive schools that exist in rural Wales?

Mr. Hunt: I appreciate the comments of the hon. and learned Member about consultation. The Labour party ought to reconsider its inflexible stance and stop hurling party political invective and insults. The people of Wales do not understand why the Labour party is the only political party in Wales that refuses to discuss its proposals with me. I believe that that is because those proposals will not stand the test of cross-examination. I promise the hon. Member for Alyn and Deeside that, if he wants to avoid cross-examination, I am quite prepared to listen to him, without interrupting or asking fundamental questions. I am prepared to meet the hon. Gentleman anywhere in Wales. I would merely ask him not to continue to impose new preconditions on consultation, but to get round the table with the rest of us to work out a solution that will endure for generations to come.
I confirm that Coleg Powys will be given independence under my announcement, and the move will be widely welcomed among the other 30 further education establishments.
I recognise the importance of the community councils, and find myself in agreement with all but three of the propositions voiced by the hon. and learned Gentleman.

Mr. Keith Raffan: I join in the congratulations that have been offered to my right hon. Friend on achieving the same reduction in the community charge for Wales as for England. Will he take this a step further and adopt England's community charge reduction scheme, which is much fairer and will remove such absurd anomalies as have occurred as betwen Rhyl and Prestatyn? Is he aware that the only time the Select Committee on Welsh Affairs—with Members of all four political parties—ever broke into unanimous applause was when a witness passionately put forward the case for unitary authorities? Is he aware that there will be wide support for the policy of moving towards unitary local government in Wales? Thank God the word "devolved" was used by a Government Front-Bench Member today. Will he consider the need for a tier of government covering the whole of Wales? In my view, that should be a Welsh assembly or senate.

Mr. Hunt: I appreciate my hon. Friend's comments, I realise that he has very strong views about transitional relief and about the community charge reduction scheme. He has made those views very clear to me in private and in this Chamber. The reduction of £140 applies to every community charge payer in Wales. That will mean a drop of 55 per cent. in community charge bills, whereas in England the figure is 35 per cent.
My hon. Friend raised the question of a Welsh assembly. The local authorities association and others have pressed upon me the case for such an assembly to perform executive functions in the Principality. I have not reached a final decision on this question, but I have to say that the suggestions that have been put to me pose very considerable problems, not least because of the uncertainties and ambiguities about the respective responsibilities of the Secretary of State and of the


assembly and about the powers of the assembly. I am not at present persuaded that the creation of an assembly along these lines would be in the best interests of the people of Wales.

Mr. Roy Hughes: Does the Secretary of State appreciate that it was a Conservative Government who reorganised local government in 1972, causing administrative chaos? In financial terms, it just about broke the Bank of England. What the right hon. Gentleman has said today suggests that the Government intend to try to repeat that exercise. Why does not he realise that the Conservative party is unrepresentative of the people of Wales? To realise how unrepresentative, he has only to look behind him. Does not he think that it would be better to leave it to a future Labour Government to make these difficult decisions? The Labour party truly represents the people of Wales, as is shown time after time in general elections.

Mr. Hunt: I am just not prepared to wait that long. The big issue in the next election will be whether Wales wishes to go forward under the progressive policies of our Prime Minister, or to go back to the failed and discredited Labour policies of the 1960s and the 1970s.

Several Hon. Members: rose——

Mr. Speaker: Order. As the hon. Member for Dorset, South (Mr. Bruce) was called on the last two statements, I shall give him a chance to recharge his batteries. He need not rise until towards the end.

Mr. Ray Powell: The Secretary of State referred to remarks of my right hon. Friend the Member for Islwyn (Mr. Kinnock). I should like to refer to a remark of the Secretary of State. Replying for the Government on a debate on local government finance on 25 July 1989, he referred to the Opposition's amendment to the motion:
It says that the community charge is unfair, bureaucratic and difficult to collect."—[Official Report, 25 July 1989; Vol. 157, c. 901.]
We all know that the right hon. Gentleman is a "Heseltini". In his statement this afternoon, the Secretary of State for the Environment said that we must alter the system so that it will be possible to collect the tax without difficulty. The Secretary of State would be wise to reread what he said and, perhaps, make a further statement. The poll tax payers in the Garw valley are jubilant because they will not have to pay anything if they get a rebate of £140. The poll tax figure there is £137, so they wonder whether they will get a refund of £3. [Interruption.]

Mr. Speaker: Briefly, please.

Mr. Powell: This is a very complex problem, and some hon. Members have sat here for three hours.
Yesterday, as a resident of Westminster, I received a poll tax bill for £350. I pay double poll tax—twice £175. When I phoned the council to find out whether I would get a double rebate, I was told, "I very much doubt it, but, if so, you will owe us only £70. In view of the fact that collection costs £68, it might be better if you didn't pay any poll tax at all."

Mr. Speaker: Order. I think that the hon. Gentleman's comments would have been more appropriate following a

statement by the Secretary of State for the Environment. The statement with which we are now dealing relates to Wales.

Mr. Powell: You did not call me, Mr. Speaker, to put a question on the statement of the Secretary of State for the Environment. I understand that to be because a statement on the situation in Wales was to follow almost immediately.

Mr. Speaker: I would have called the hon. Member to ask a question relating to Westminster.

Mr. Powell: As I live in both places, I ought to have been called on both occasions.
Despite all the support that the Secretary of State for Wales has given to the Secretary of State for the Environment, the poll tax is in a mess. He is doing all he can to get Tarzan out of the jungle, but can he get the jungle out of Tarzan? That is what we want to know.

Mr. Hunt: Now we know why the Labour party is in such chaos over these proposals. The comment that I repeated was made not only by the leader of the party. The hon. Member for Sheffield, Brightside (Mr. Blunkett), who is the party's spokesman on local government, said of a local income tax:
I have been an advocate of this as an addition to—not a replacement for—the rating system for a long time.
Those words are from the 16th of the 66 statements. No wonder we do not know what the Labour party stands for. The hon. Gentleman is fortunate not only to have more than one home but also to be able to expect a double dose of £140 in Westminster. The £140 comes off the community charge headline figure, not only in Wales but also in England.
The hon. Gentleman mentioned the Garw valley. Let me tell him that a lady from that area contacted my office and said, "Mr. Hunt, we all want you to come to the Garw valley and increase your popularity by distributing the money yourself." Sadly, there will be no refund, but people in the Garw valley will pay no community charge.

Mr. Dafydd Wigley: Is the Secretary of State aware of the very great welcome that we give to the ending of the poll tax? It is an iniquitous tax, and the people of Wales have wanted to see the end of it. However, we should have much preferred to see it replaced by a local income tax, and we have some doubts about the practicality of a head count in each household.
Will the Secretary of State, in the light of what has been said by the Secretary of State for the Environment, confirm that the local government commission for England that has been announced will have nothing to do with the situation in Wales? We in Wales have a tradition of doing these things ourselves. Does the right hon. Gentleman intend to set up a local government commission for Wales? He is considering the establishment of unitary authorities. This is something that appears to unite all four parties in Wales. Comments made by the hon. Member for Delyn (Mr. Raffan) a few moments ago suggest that there may be room for consensus also on the creation of an elected upon tier of democracy in Wales. If the Secretary of State were able to get representatives of the four parties together at this level, he would be doing a tremendous service for the people of Wales.

Mr. Hunt: Those who argue for a local income tax have not thought through the implications of what they


propose. I am not persuaded that it is administratively feasible. It does not accord with the fundamental principle that almost everyone should pay towards the cost of local services, and it is contrary to the Government's commitment to keep taxes on income to the lowest possible level. I assure the hon. Gentleman that I carefully thought through all the arguments that he put to me.
As for the commission, I agree with him that it is important for us to do these things ourselves in Wales. I was not proposing to set up a commission. But, of course, I am happy to listen to representations from those who think that we should. I adhere to the view that we do these things much better ourselves in Wales.

Mr. Gareth Wardell: Does the right hon. Gentleman agree that the inclusion of the poll tax in the 1987 Tory party manifesto was a mistake? Does he further agree that, when Ministers and hon. Members go abroad, they should preach the gospel wherever they go to the effect that any Government who introduce a poll tax do so at their peril?

Mr. Hunt: I believe that it was right to get rid of domestic rates, and I agree with the Leader of the Opposition that it was the most unjust of taxes. I also believe today that it would be wrong to continue with the community charge, and I have made that clear from the Dispatch Box. I intend to abolish it at the earliest opportunity. I understand that Gorseinon college is in the hon. Gentleman's constituency. I hope that he will rejoicce with all at that college being independent, and that is a result of my decision today.

Mr. Ted Rowlands: If the Secretary of State had a little more integrity, he would have said, in making his statement, that he had made a modest contribution to the turmoil in which Welsh finance has found itself in the past two years as the result of imposing a totally unpopular and unfair tax. If, according to the right hon. Gentleman, he has an open mind on the major issues with which we are now concerned, will he now state that if it emerges from the consultations that there is a justifiable demand for a Welsh assembly, above the unitary authorities, neither he nor the minority group in the Tory party who represent Wales will stand in the way of that demand?

Mr. Hunt: I am not sure that the hon. Gentleman is not trying to rewrite history. It is within my recollection—I was in the House at the time—that in 1979 there was a referendum on the question of an assembly in Wales. By a four to one majority, the people of Wales voted against it. We must be careful before we ignore that decision.

Mr. Alan W. Williams: When replying to my hon. Friend the Member for Gower (Mr. Wardell), the Secretary of State said he thought that the community charge had been a mistake. Will the right hon. Gentleman now apologise to the people of Wales for the leading part that he played in formulating that piece of legislation? Will he in particular apologise to the many hundreds of thousands of people in Wales who suffered severe hardship as a result of the introduction of the poll tax?

Mr. Hunt: The operation of the community charge has been remarkably successful in Wales compared with the

situation in England. Just before coming into the Chamber I was given figures showing that local authorities in Wales have now collected more than 95 per cent. of the money due under the community charge. I readily admit, and said so to the hon. Member for Gower (Mr. Wardell), that just as I believe it was right to abolish the rates, so I believe it is now right to abolish the community charge.

Mr. Win Griffiths: It was apparent from the Secretary of State's announcement that, beyond saying that there would be a property tax with a poll tax element of some sort, he had little idea of precisely what we would end up with. In that connection, several questions must be answered. For example, will all houses in Wales be revalued? If they are revalued for the purpose of the new tax, will all house owners and tenants have the right to appeal against the new valuations?
Problems are likely to arise over the definition of "adult" in a household. The allowance for the number of people in a household may be as little as 1 per cent. Whatever the percentage, will any weighting be allowed for each adult, depending on whether they are or are not earning money? In other words, will there be a zero rating in that situation? Many other questions will have to be answered, but I hope that the right hon. Gentleman will answer those at this stage.
Finally—[Interruption.] We also had a statement on further education. Bearing in mind the ballot decision for schools, will there be a ballot in sixth form colleges, and will the right hon. Gentleman comment on the situation in Coleg Powys——

Mr. Speaker: Briefly, please.

Mr. Griffiths: I do not know whether the Secretary of State realises that Coleg Powys is on the same site as Brecon high school. How will the boundaries be defined for the purpose of this public limited company?

Mr. Hunt: The hon. Gentleman is a walking example of the fact that the Labour party should now rethink its whole approach to local government and come in and engage in the consultation process. Some of the questions that he asks are precisely those on which I shall now be consulting.
From the Labour party document on rates, it is clear that Labour Members have already decided that they will use the existing rates registers and will rely on them
for as long as is needed to undertake a complete revaluation.
In other words, Opposition Members are committed. I want them to back away from that commitment and to come in and discuss matters on the basis that I have announced this afternoon.

Mr. Donald Anderson: It is astonishing that the Secretary of State has not thought fit to apologise. He is claiming an alibi, though his fingerprints have been all over the poll tax from the start. Will someone in central Government, notably in the Cabinet, be surcharged for the cost to Swansea city council this week of sending out 140,000 poll tax bills? Someone is responsible for that and someone will have to pay. Will it be the taxpayer?
The new two-tier tax will require a head count. Will it involve a register analogous to that of the poll tax? Will that not involve the same sort of administrative costs and burdens as the poll tax? In Landore ward in my constituency, £7·40 will be the total charge for those with


full exemption under the poll tax system. It costs Swansea city council £11 to collect that sum. What is the Secretary of State's advice to that city council—to collect or not to collect that £7·40?

Mr. Hunt: Against a background where Wales—I pay tribute to the local authority officials involved—has achieved more or less the same collection rate as was achieved under the old rating system, I see no need to apologise. Indeed, there is need to praise local authorities in Wales for having achieved such a commendable result.
The question of collection is for the local council, and the hon. Member for Ogwr—[Interruption.] The hon. Member who represents Ogwr, the hon. Member for Ogmore (Mr. Powell), will know the situation in Westminster, where apparently it is not thought to be worth collecting. The question of collection is for each individual council.
On the totality of what has been said, I wonder what the Labour party is so scared of. What is it so worried about that it will not follow the example of the Conservatives, Plaid Cymru and the Welsh Liberal Democrats? Are the Labour Members scared because they have not thought through their proposals and do not know the figures, and are not prepared, therefore, to put them on the table? They ought to be ashamed of themselves.

Dr. John Marek: If the Secretary of State accepts my charitable assumption that the education changes that he has announced have more to do with education than with the survival of the Conservative party at the next general election, can he spell out what is wrong in his eyes with the present governance of the north-east Wales institute and its links with Clwyd county council? He must know that the county council was to spend £11 million on tertiary reorganisation. Who will provide that money now?

Mr. Hunt: I made it absolutely clear that approximately £100 million is being spent in Wales on tertiary education. It is my intention to have the same amount of resources available for further education colleges and sixth form colleges. There are no problems on resources. The hon. Member for Wrexham (Dr. Marek), who talks to me positively and constructively about problems in his area, should say to his hon. Friend the Member for Alyn and Deeside (Mr. Jones), "Go arid see the Welsh Secretary, just as all the others have done. Sit down and talk through the problem with him." The hon. Member for Alyn and Deeside cannot duck the issue of consultation any longer.

Mr. Ian Bruce: I listened carefully to the statement and to the questions. I am grateful to you, Mr. Speaker, for calling a Welsh-born Member who represents the English taxpayer. I cannot understand why my right hon. Friend, on the one hand, is saying that he is pleased to get rid of the community charge and, on the other, is making an enormous reduction in the bills. Will he be able to justify to the people of Wales doing away with a taxation system that would charge only £95 to someone in full work who could probably pay a great deal more? What will he put in its place? Because it is fair that

people in England should pay a particular percentage, should not exactly the same conditions apply in Wales in regard to the money given from central taxation?

Mr. Hunt: I did make an apology before; the apology was for securing what has been described to me by some local authority leaders as an astonishingly excessive amount of Government support for local authority services in Wales. I plead guilty, but I will never stop fighting for the best possible deal for Wales. If it means that community charges in Wales come down by 55 per cent. whereas in England they come down by 35 per cent., I plead guilty, and I apologise to the House for winning too much money for Wales.
I see no reason why the introduction of a new system should lead to a reduction in resources for Wales. It did not do so when we introduced the community charge, and it should not if we decide to introduce a new system. The real question is, would the hon. Member for Alyn and Deeside win as much for Wales in a Labour Cabinet as I have done in a Conservative Cabinet?

Mr. Barry Jones: May I again invite the right hon. Gentleman to apologise to the people of Wales for his role in imposing the poll tax upon them? Does he agree that he was guilty of a monumental error of judgment for which he must apologise to the people of Wales?

Mr. Hunt: I do not accept that. I said before, and I say again, that I believe that it was right to abolish the most unjust of all taxes—the domestic rating system—and I believe that it is right now to abolish the comunity charge. The hon. Gentleman cannot keep ducking the issue——

Mr. Jones: rose——

Mr. Speaker: Order. No interventions on an answer.

Mr. Hunt: The hon. Member for Alyn and Deeside is shouting at me. He should come into my office——

Mr. Jones: rose——

Mr. Speaker: Order.

Mr. Hunt: He should come into my office and sit down, in the same way as Plaid Cymru, the Welsh Liberal Democrats and the Conservatives have sat down. Why is he running scared?

Mr. Jones: rose——

Mr. Speaker: Order. We cannot have interventions in the middle of an answer.

Mr. Hunt: I shall speak to the hon. Member for Alyn and Deeside again when he provides an explanation of why he has come to the Chamber and yet at the same time is running scared.

Mr. Jones: rose——

Mr. Speaker: Order. Has the Secretary of State finished?

Mr. Hunt: indicated assent.

Local Government Review (Scotland)

The Secretary of State for Scotland (Mr. Ian Lang): With permission, Mr. Speaker, I wish to make a statement on the Government's community charge review as it affects Scotland.
These are our preliminary conclusions on local government finance, functions and structure, on which we will now have further and detailed consultation.
A vitally important part of our conclusions is the step change in central Government funding for local authorities announced by my right hon. Friend the Chancellor of the Exchequer in his Budget statement on Tuesday. That is a major shift in the balance between central and local funding of local authority expenditure, and it recognises that the burden of local authority services has borne too heavily on the local tax base, not least because of the failure of local authorities to keep their spending at levels which it is reasonable to ask local taxpayers to support. For example, in the first year of the community charge, Scottish local authorities increased their budgets in real terms by 5 per cent. and, for the coming year, they have increased charge levels by an average of 30 per cent., despite a generous grant settlement. The Government have now tackled that aspect of the problem head on, by reducing local tax bills substantially.
We have nevertheless considered how best the reduced tax bill should be met, in a way which is fair, which is easy to administer, which spreads the burden as widely as possible, and which enables councils to remain accountable to their electors. As my right hon. Friend the Secretary of State for the Environment has announced, we now propose to replace the community charge with a new local tax which will have elements based both on the value of the house and on the number of persons living there. We will be issuing a consultation paper on the new tax soon.
The details of the new tax and the options for the personal and property elements, and the relationship between them, will be set out in the consultation paper. For Scotland, that will take account of distinctive Scottish circumstances. I can reassure the House, however, that the new tax will not suffer from the defects of the old domestic rating system. Most obviously, it will take account of the number of people in the household. People will also, rightly, expect us to ensure that disproportionate tax burdens are not placed on a small minority of households and that there are no large fluctuations following periodic revaluations. There will also need to be effective transitional arrangements when the new tax is introduced, which we plan to be in 1993–94 if possible, in Scotland as in England.
We will also ensure—if need be through rigorous capping of local authorities' expenditure plans—that the now reduced burden which local taxpayers will face is not increased once again to unacceptable levels by local authorities' spending decisions.
There is no change to the Government's policy on non-domestic rates, where we retain our aim of harmonising rates in Scotland with those in the rest of Great Britain.
It does not, however, make sense to look at the financing of local government in isolation from the functions which it discharges, and the burden thereby

placed on the local tax base. I shall be giving further consideration to the allocation of functions as between central and local government, and consulting on possible changes.
I have, however, already reached a view on the position of Scottish further education colleges, which have a vital role in meeting the skill requirement of industry and commerce. We wish to strengthen their ability to perform that role. Many local authorities have run further education colleges with commitment and skill, but we are entering a new era, both in local government and in vocational education and training. Following recent legislation, colleges now have increased management powers exercised by college councils, with a stronger employer representation; but I should like to see them have the appropriate degree of freedom to respond more fully to the demands of students and the labour market. I believe that, alongside the establishment of local enterprise companies in Scotland from 1 April, this would help to promote the development of a modern, skilled work force.
The Government propose, therefore, to introduce legislation at the earliest opportunity to take all further education colleges in Scotland out of local authority management. I intend to vest the colleges, which I propose should be free-standing corporate bodies, with the land, buildings and equipment which they currently use. From 1 April 1993, the colleges will be funded by the Government. I intend to give staff the right of transfer of employment to the Government-funded colleges. Over £200 million is spent by local authorities on further education in Scotland. These resources will become central spending, with the corresponding reduction in grant to local authorities.
My right hon. and learned Friend the Secretary of State for Education and Science has already highlighted the importance, prior to 1 April 1993, of ensuring that the work of the colleges, their staff and students continues undisturbed. Therefore, I also propose to seek Parliament's approval to a number of measures similar to those already announced by my right hon. and learned Friend to have effect from midnight tonight in the forthcoming legislation in order to achieve this. I am placing further details of these measures in the Official Report.
My Department will be writing to all education authorities to explain how these measures will be applied. Details of our proposals will be published in due course.
It naturally flows from the consideration of funding and functions of local authorities, that we need to consider also the best structure for local government in Scotland. The present two-tier system has some advantages, but it also has some clear disadvantages. It blurs lines of accountability and it can lead to duplication, conflict and delay. It is often perceived as unnecessarily bureaucratic and remote from local needs.
The traditional role of local government is changing from provider to enabler. The structure must keep abreast of that change. I believe that we should now prepare to move to single-tier local authorities throughout Scotland. This will strengthen local accountability, and I believe that it will deliver local services more effectively. This is an important step to take and I envisage widespread consultation before proceeding to final decisions. I therefore propose to publish a consultative paper, setting out options for a new single-tier structure and seeking


views on possible functional changes and on options for improving the management and efficiency of local government in Scotland.
Since we announced our decision to review local government finance last December it has become clear that there is widespread demand for further change. The proposals that I have put forward today are, in the Government's view, a coherent and inter-related response affecting the funding, functions and structure of local government. They offer a basis for informed consultation and then durable change which, I hope, will command widespread support. I commend them to the House.
Details of the measures are as follows:
The Government propose to introduce legislation this autumn by means of which, from April 1993, all further education colleges in Scotland, under the management of an education authority offering full-time education will be taken out of local authority control and will be funded by the Government. My Department will be writing to all education authorities to explain how these measures will be applied. Details will be published in due course.
Institutions in the new sector will be free-standing corporate bodies, and will be vested with the land, buildings and equipment which are currently used by them. It is important that, prior to April 1993, the work of the colleges, their staff and students continues undisturbed. I intend, therefore, to seek Parliament's approval to legislation which requires the specific consent of the Secretary of State for all disposals by local education authorities of land or interests in land, including buildings used or held or obtained for or in connection with the purposes of the colleges. This will also apply to disposals or removal of equipment.
The disposals of land or interests in land requiring the consent of the Secretary of State will include outright sale, feuing, granting or otherwise disposing of any leasehold or other interest in land, direct sale and leaseback, and any arrangement designed to raise capital on the security of the land. It will also include any disposal which is made in return for the supply of goods or services. In referring to disposals I include entering into any binding obligation to make a disposal of the kind in question.
I am also concerned that, in the interim period before the establishment of the new sector, local authorities should not enter into contracts which bind the colleges beyond 1 April 1993 when they begin to manage their own affairs. Such contracts should be entered into only with the specific consent of the college councils of the colleges affected. Contracts for a consideration having a value in excess of £50,000 will in addition require the consent of the Secretary of State. The forthcoming legislation will seek Parliament's approval to a measure having this purpose.
I shall also seek Parliament's approval for appropriate sanctions where property or equipment has been disposed of or removed or contracts entered into without obtaining consent in advance. In the case of the disposal of land or interests in land without the consent of the Secretary of State, there will be a power of compulsory purchase with a right of recovery from the local authority of any compensation payable. In the case of contracts, including contracts for disposal, entered into without the consent of the college council concerned or, where applicable, the consent of the Secretary of State, there will be a right of repudiation, and such repudiation will be deemed to be a repudiation by the relevant local authority, so that any liability in damages will remain with the relevant local authority.
I shall seek the approval of Parliament for these measures to have effect from midnight tonight. This statement does not affect enforceable obligations entered into before midnight tonight.

Mr. Donald Dewar: Given the right hon. Gentleman's known and oft-expressed views, this must be the greatest humiliation for a Scottish Secretary since the office was established. The Government are in disordered retreat. The poll tax, in their own words, is admitted as a monumental disaster. It has oppressed the

poor, divided the nation and created havoc. I am aware that many have been looking for apologies tonight, but I think that we in Scotland have a special case. The right hon. Gentleman should start with an apology to Scots for introducing the poll tax to Scotland a year before anywhere else, for defending the indefensible and for fighting to retain a poll tax element that Scotland does not want. The belated recognition that a property-based system—a rating system, in fact—makes sense means that the Secretary of State will have to spend the next two years denying everything that he has said in the past two years. Today's announcement is a massive vote of no confidence in his judgment.
We have been told that the poll tax is dead, but it is clear that a Tory vote at the next election means that people will be paying poll tax for at least another two years, and that even after April 1993 the one certain thing about the new measures is that there will still be a poll tax element in them. Does the Secretary of State accept that almost every Scot will see this as a desperate last throw by those in the Government who believe in getting the worst of every world?
The proposed package will mean delay, confusion and expense. It will mean chaos and misery because the system will simply be unable to cope with the Government's dithering and indecision. We know that the cost of shredding and reissuing bills in Scotland as a result of this week's Budget announcement will amount to £8 million. What will be the final price of this ill-thought-out, inconsistent dog's breakfast of a scheme? If so much had not been wasted by the Government, how many more teachers and home helps could be serving the community now?
The statement refers to a single bill for each household with two essential elements. Will the Secretary of State clarify one central point? Does this mean that there is a property tax and, added to it, a distinct charge based on the number of adults in the household? Or is it a case of the number of adults varying the property tax? To put it another way, is it two taxes added together in one bill, or a property tax varied by the number of adults in the house—a form of rebate on the property tax? If it is a distinct, separate tax based on the number of people in the house, will it be a flat rate charge? The Secretary of State must surely be able to answer those fundamental questions. If not, it will be demonstrated that he has no idea what he is proposing in practical terms.
Can the Secretary of State guarantee that the new system will not involve the administrative apparatus of the poll tax in any form? Will the poll tax register go for good? If the householder alone is liable for the single bill, is that not an admission—I hope that the Secretary of State will explain this—that the wrong-headed theory of accountability used to justify the poll tax has been totally abandoned?
Can the Secretary of State give a guarantee that the oppressive 20 per cent. rule will be abolished? Does he accept that it would be intolerable if that were to scar any new system?
The Secretary of State referred in his statement to periodic revaluations. That sounds a bit like a rating system to me. Can he say a little more about when we shall know the basis of that revaluation and what options are in the frame?
On structural reform, can the Secretary of State say when the consultative document will be issued? In his


desperation to solve his problems, I warn him against attempting to do so by destroying local democracy. Does he, for instance, believe it right that after the switch in expenditure announced by the Chancellor local government in Scotland will control only about 13 per cent. of its expenditure? Will he perhaps comment on what that is likely to do for the gearing effect which has caused such problems under the poll tax?
Will the Secretary of State note that the Labour party is prepared to look at one-tier, all-purpose authorities but as part of a planned drive to strengthen democratic control by introducing a Scottish Parliament? What we will not support is any reform programme which amounts to sending in the broker's men to dismantle local democracy. The end product must be a system which allows local communities to run their own affairs through accountable local representatives. The Secretary of State will get no support from Labour Members for moves which are designed further to centralise power in the Scottish Office.
On Tuesday the Prime Minister promised all the answers, but what we have is a reflection of the Government's confusion. There is a total lack of detail and of clarity. The Prime Minister told us last November that he had not a clue what to do about the poll tax. Today's announcements suggest that nothing has changed.

Mr. Lang: I think that I can take the questions of the hon. Member for Glasgow, Garscadden (Mr. Dewar) as a qualified welcome for some of the proposals embodied in my statment.
The hon. Gentleman complained about the community charge being introduced a year earlier in Scotland than in England, but he forgets that we also abolished the domestic rates in Scotland a year earlier than in England. We are, of course, determined to allow no opportunity for the Labour party to reintroduce either its rates policy or its roof tax policy.
The hon. Gentleman asked about the waste embodied in the change-over. Perhaps he should look at the spending budgets of local authorities this year, those who are planning a 10 per cent. increase when inflation is likely to fall to about 5 per cent.
The hon. Gentleman also asked about the relationship between property and the personal element. We are consulting about that. I hope that the Labour party will overcome the natural shyness that has surrounded its proposals for funding local government and will offer to consult with us on that.
Further consideration is required on the 20 per cent. rule of the existing community charge. We shall look at that further in our own time.
We shall also be consulting on the basis of valuation and revaluation. Our purpose will be to ensure that under the new local tax local residents will not be open to the high charges that they faced under domestic rates and the community charge. The imposition of excessive burdens on individuals and small parts of the community will not be possible.
The hon. Gentleman asked when the consultation papers will be issued. The local tax paper will be issued soon after Easter and our consultation paper on the structure will be issued some time after that.
The hon. Gentleman asked about the effect of gearing on the contribution by local residents. Clearly, it is

important to take account of the interests of local residents. If local authorities have been unwilling to respond sensibly to their accountability to local residents under the community charge system, we shall have to take account of the need for accountability to the United Kingdom taxpayer who is now funding a substantial proportion of local government spending.
I welcome the hon. Gentleman's support for one-tier local authorities throughout Scotland, but it is absurd to reduce bureaucracy and tiers of government by abolishing one tier, only to reintroduce them in the form of a Scottish Assembly with tax-raising powers. That does not make sense. The hon. Gentleman should consider the package as a whole. For the first time, we are looking at the funding, function and structure of local government all at once. I believe that our answers will commend themselves to the people of Scotland.

Mr. Bill Walker: Is my right hon. Friend aware that I am delighted at the Government's acceptance of some of the proposals contained in my paper? In particular, I commend the transfer to value added tax of a proportion of the community charge. The £140 reduction will be very welcome to the people in my constituency and throughout Scotland. I also welcome the proposals on education as the beginning of moves towards other measures proposed in my paper.
I welcome one-tier local authorities, which was also a proposal in my paper. I believe that it is essential that the authorities are close to the people. That is why I believe that they should be based on the districts. That is important. I welcome the opportunity for consultation because I believe that, thus far, the Government have shown that consultation means just that. If it did not, they would not have accepted so many of the measures contained in my paper.
We should now concentrate our energies and efforts on exposing the fraudulent individuals who have not paid their community charge and who are unfit to sit on local councils or in Parliament because they will not accept the law of the land.

Mr. Lang: I am delighted at my hon. Friend's delight. He is living testimony to the value of consultation. It is a pity that the Labour party does not have sufficient confidence in its proposals to enter into consultation with us.
My hon. Friend welcomed the increase in central Government funding which has enabled community charges to be reduced so substantially for next year. I am sure that he will welcome the fact that in Tayside region the community charge level will be down to £245 in Angus and £253 in Perth and Kinross. In Dundee city, however, under strong Labour control, the charge remains £295.
I note my hon. Friend's preference for districts as the basis for single-tier local authorities. That may be the best solution in some parts of Scotland. It may be individual districts or combinations of districts. However, that may not be appropriate throughout Scotland. In other areas it may be that the regions will form a better basis. The consultation process will give us an opportunity to hear views from all over Scotland on this important matter.

Mr. Malcolm Bruce: Is it not a disgrace that Scotland, having suffered the injustice of this wicked tax being imposed upon it first, had to wait so long for a statement—the last statement today? Will the Secretary of


State accept that for the past two years he and his Government have been digging a hole for themselves into which, on Tuesday, the Chancellor threw £4·25 billion of taxpayers' money? Today the Secretary of State and the Government are digging again. They have replaced the most unpopular tax with two unpopular taxes—a combination of the rates and the poll tax. How will it be more efficient and simple to collect if it requires both a valuation of property and a head count? Will it not be more expensive to collect than either the rates or the poll tax?
We welcome the fact that the Government have taken on board almost all the recommendations that the Liberal Democrats put to them on the structure of local government. We believe that there should be single-tier local authorities and that they should be drawn up on the basis of the wishes of the local community and not imposed centrally or uniformly.
Will he acknowledge that the removal of further education colleges from local authorities is not justified in terms of administration? Which local authorities have failed to provide the necessary investment and support to the further education authorities upon which he is justifying this move?

Mr. Lang: I am not suggesting that any local authorities have failed to do that. I said that most local authorities had run their further education colleges with skill and commitment. However, we are making new arrangements and attaching new importance to vocational education and training and, given the changed role of further education colleges and the new college councils that we are setting up with a strong private sector component, it is appropriate to give them independence and fund them directly from the Scottish Office. That allows local authorities to concentrate more fully on providing services or enabling the services to he provided. That is their more important obligation.
I welcome the support of the hon. Member for Gordon (Mr. Bruce) for some of the elements of the statement. Again, it is testimony to the value of consultation. I valued the meeting that I had with the Liberal Democrats. I did not agree with them about a local income tax because it would be difficult to administer. Also, a burden of 8p or 9p in the pound on the basic rate of income tax would not be an acceptable burden in Scotland. However, I value the hon. Gentleman's support for the other measures.
The hon. Gentleman suggested that we threw £4·25 billion of taxpayers' money at the problem. He forgets that that money is being raised from the taxpayer in the form of extra VAT. It is being raised in a way that is more widely spread and more certain of collection than has been the case with the community charge.
The new local tax will not be two taxes. It will be one tax bill with two components, the details of which have yet to be established. Again, I would welcome continuing consultation with the Liberal Democrats to establish how best that can be achieved.

Mr. Robert Hughes: Never in the course of human history has such abject failure been admitted with so little humility. The Secretary of State has demonstrated that he has learnt nothing from the poll tax disaster. Is he not simply producing the poll tax by another

name? The new system will have all the difficulties, penalties and failures that we have had to suffer for the past few years.
The right hon. Gentleman said that he is prepared to consult on relationships in local government. Is he aware that we in Scotland are concerned with only one consultation—a consultation with the electorate at a general election—when the Secretary of State, like the right hon. Member for Finchley (Mrs. Thatcher) and the poll tax, will be swept into the dustbin of history?

Mr. Lang: I am happy to defend some of the underlying principles of the poll tax, which achieved a valuable improvement in accountability and in the spread of the burden of local government. Of course there have been disadvantages. The changes to the register were far more substantial than we had expected, even on the basis of the most professional advice. The failure of some local authorities adequately to collect the charge added to our problems, as did the high spending levels of some local authorities.
We must ensure that the gains and the underlying principles of the community charge, which were broadly accepted, are not lost sight of. Those principles are being carried forward in the new arrangements—we are creating a broader tax base and greater accountability, and we have achieved a greater recognition by local residents that local services must be paid for. The cost of local services has risen substantially and we must find the fairest and most durable way of paying for them. In that context, it is sensible to consider function and structure as well as funding. That is what we are doing. We should welcome consultation with the Opposition on the details of our proposals.

Mrs. Maria Fyfe: Can the Secretary of State tell us whether, under his proposals, joint and several liability will be ended? Can he say whether Scottish poll tax payers will get more than the £140 reduction in their bills because we have faced those bills for a year longer? If any of the changes are justified, surely more money must be forthcoming for Scottish poll tax payers.
Is not it a disgrace that further education should be swept up in the general debate? It is an issue of such major importance that it should be dealt with in a debate of its own. What are Scottish further education students who wish to learn crafts and pursue other such studies and their potential or real employers supposed to do if they are dissatisfied with the level of funding for or provision of courses, or with any other aspects? They could take their complaints to the local authority, but they will now have to take them to a Government who, by their actions over the past 12 years, have shown that they never listen and never understand.

Mr. Lang: I entirely agree about the importance of further education. If I were to make a separate statement about that, the House would be sitting all night. I am sure that the House will understand the desirability of making a statement on further education alongside other local government reforms as they are related. The Government attach great importance to further education, which is why we are making changes. In the new funding arrangements for further education colleges, there will be a basic budget


and another incentive budget related to the number of students that they attract. That will be of great value to further education.
The hon. Lady asked about joint and several liability. That will remain for the remaining period of the community charge. Any new arrangements will apply in the context of the new local tax.
Retrospection of the increased contribution from central Government relates to the level of community charge payments being asked of local residents in the coming year. It is our purpose that the money should go straight to them and not run the risk of being diverted into local government to end up in higher spending. Does the hon. Lady believe that the increase in VAT should also be retrospective?

Mrs. Irene Adams: Does the Minister agree that it is an affront to democracy that he should come to the House and say that he has half an hour to tell us about changes in local government finance and functions to a measure which spent about 140 hours in Committee and had to be guillotined? Should he not have made separate statements on education and on finance? Will he now make a statement on the 20 per cent. rule? Does he agree fundamentally with the 20 per cent. rule, or does he intend to change it? Does he intend to collect the 20 per cent. on the property element of the new tax or on the individual element of the tax? Will he now make a statement?

Mr. Lang: The hon. Lady's questions will be answered in the consultation process. We have our views on what might be the best solution, but we believe in consultation. I wish that the Labour party would join in.
The hon. Lady will have heard the answer that I gave a few moments ago about a separate statement.
On the question of the time available to consider such matters, I emphasise that we shall publish a consultative document on the important features of my statement. There will be ample opportunity for further consultation, debate and consideration of all aspects of these important proposals.

Mr. Gordon McMaster: Does the Minister realise that, following his humiliating U-turn, he is left without a shred of credibility? Will he try to redeem himself by ensuring that the people of Scotland, who, after all, have paid the evil poll tax for a year longer than people in any other part of the country, are properly compensated? Will he fight in the review and in all the consultations to ensure that the 20 per cent. rule is abolished so that pensioners and the poorest people in our community will be taken out of the poll tax immediately? Will he dither and daily over reform of local government structure as he has over the poll tax, or will he learn that he who Heseltines is lost?

Mr. Lang: We got rid of domestic rates in Scotland a year earlier than in the rest of the United Kingdom. It is our purpose that by maintaining a Conservative Government we shall never have to return to domestic rates. The 20 per cent. rule and other matters relating to the continuance of the community charge are still under consideration.

Mr. George Foulkes: On the poll tax element of what we now know as the Bill Walker tax, can the Secretary of State tell us how he intends to deal with student nurses and students in general and with service men? What arrangements will he make for adults who move house during the course of a year and how will he deal with a household that takes in an elderly adult relative to care for? How will adults be registered? Will there continue to be a poll tax type register or will the electoral register or Inland Revenue information be used? Those are all important questions. If he cannot answer them—as he and his colleagues have been unable to answer many previous detailed questions—we can come to only one conclusion: the two-tax system has been introduced in panic in exactly the same way as the poll tax was introduced after the revolt of the Troon ratepayers—the Secretary of State was one of them—following revaluation. This tax would suffer the same fate as the poll tax if it were introduced. Thankfully, it will not be introduced because as soon as the electorate knows the truth it will ensure that the measure has no chance of seeing the light of day.

Mr. Lang: One minute we are accused of dithering, the next we are accused of panic. The truth is that we are proceeding in an orderly way on a range of important and interrelated issues. We have thought through our preliminary findings, narrowed the options and presented our views to the House at this interim stage. We have also invited the Opposition and others to join in the consultation process. It is clear that the hon. Gentleman has a number of views on specific aspects, which we must resolve. I hope that he will take part in the consultation—the quality of the outcome would be that much better for it.

Mr. Ernie Ross: Today we have watched a Secretary of State who, as a Whitehall policeman knows, has recently been wandering around aimlessly looking for something to get hold of. He does not even have the support of his Back Benchers—the situation is worse even than for the earlier statement on Wales. The Secretary of State for Scotland has only one Back Bencher to support him, and that only because the hon. Gentleman concerned thinks that he wrote the paper. It is a shambles. We have to listen to this aimless Secretary of State telling us how Bill Walker saved the people of Scotland when 10,000 civil servants in the Scottish Office are supposed to be doing that. We might feel like joining in the consultation process if the Secretary of State would answer some of our questions. Unless and until he does, he cannot expect us to do other than put his proposals to the test at a general election.

Mr. Lang: I shall welcome putting them to the test in a general election. I have no doubt that our single new tax will be preferred to Labour's roof tax and rates.
On the question of support, I notice that only about a third of the Scottish Labour party is here today. My hon. Friends are out and about in Scotland proclaiming the virtues of the new arrangements.

Mr. Adam Ingram: My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) asked one question that the Secretary of State did not answer. Will the Secretary of State confirm that a vote for the Tory party at the next election will mean a vote for another two


years of the poll tax in its present form'? On what basis will the new charge be levied? What services will it cover and which authority will be responsible for administering it? Is it not the case that the poll tax is not dead but alive and well in the new Tory two-tax?

Mr. Lang: No, that is not true. We propose a single tax with a property element and a personal element. The benefit of that is to achieve a tax which is durable and stable, and which keeps a broad base, such as we have achieved under the community charge.
The hon. Gentleman asked me about voting for the Conservative party and thus keeping the community charge that much longer. The Labour party could not wind up the existing community charge arrangements any quicker than we can. The hon. Gentleman asked which authority would be responsible for levying the tax. That will depend on the outcome of our consultations on the structure of local government, and I hope that the hon. Gentleman will give us his views on that.

Mr. Alex Salmond: It might add to the general amusement of the House if the Secretary of State would detail for our benefit the exact moment when he was dragged to the conclusion that the poll tax ought to be abolished. The Secretary of State refuses to give an apology to the people of Scotland. Will not he acknowledge that there will be a tremendous groundswell of opinion that there should be compensation for the additional year in which Scotland had to suffer under the poll tax burden?
Is the remark in the statement by the Secretary of State for the Environment that most people should be asked for a contribution an acknowledgement from the Government, at last, that the sick, the poor and the unemployed—those with no capacity to earn—should not be dragooned into making contributions for local services? Does the Secretary of State agree that in those circumstances, with a tax in which no one—not even he—believes, it would be wholly unacceptable for poindings, warrant sales and benefit arrestments for the poll tax to continue for people who have no capacity to earn? Does the Secretary of State accept that if Scotland had followed the advice of the Labour Front Bench, and stumped up and paid up, he would not be suffering such humiliation at the Dispatch Box today?

Mr. Lang: I do not believe that compensation would be appropriate in Scotland because we got rid of domestic rates a year earlier any more than I believe that compensation is due to the English because they had to keep domestic rates a year longer. The hon. Gentleman raised the matter of recovery processes. He seems to live in a curious make-believe world which does not recognise that local government has to be paid for. He should contemplate the severe difficulties in which he and his hon. Friends in the Scottish National party have placed many people who followed his advice. It is wholly irresponsible for Members of Parliament who come to this place and make laws to urge people in Scotland to break them, and they have no right to speak with authority in this debate.

Dr. Jeremy Bray: Is the Secretary of State aware that everyone in Scotland, and especially in Lanarkshire, will be glad to see an end to the poll tax? However, it is an especially tragic time in Scotland for the Government to have the whole structure of local

government and of local government finance fall to bits in their incompetent hands. Does the Secretary of State realise that we have already lost 3,000 jobs in steel in Scotland this year and that there will probably be another 5,000 consequential job losses? At this time we need a smoothly functioning structure for local government, industrial development and local finance, but all we have is a shambles.
We have a new enterprise company which has had its training allowance cut at a time when it should he providing 8,000 new jobs. We have a steel readaptation benefit scheme so incompetently administered from Sheffield that it is incapable of handling the redundancies that have already occurred. Vital effort is needed from Bell college and Motherwell college in the retraining of thousands of workers, yet the future of those colleges is being thrown into total uncertainty by the crazy collapse of Government policy. May not some priority, some finance and some competent administration be given to the crisis that we face in Lanarkshire?

Mr. Lang: The hon. Gentleman does himself no service and underrates the enormous commitment of many bodies and organisations in Lanarkshire, both public and private, to come together and work for the economic regeneration of that county. My hon. Friend the Parliamentary Under-Secretary of State for Scotland—the Minister for Industry and Local Government—supervises a working group on which regional and district councils, the East Kilbride development corporation, the local enterprise company and other bodies are represented. All have come together and all have substantial resources, commitment and finance at their disposal to bring to bear on the problem. No one can say that the Government are neglecting Lanarkshire when we are bringing so much attention to bear on its problems. What we propose now will release the further education colleges to expand, to develop and to improve the quality of training for the future.

Mr. Norman Hogg: Does the Secretary of State recall that the hon. Member for Eastwood (Mr. Stewart), who is the Under-Secretary of State, and the hon. Member for Stirling (Mr. Forsyth), who is the Minister of State, vigorously campaigned against any proposal for a property tax'? How do they reconcile their position with supporting the new double tax, which is both a tax on property and a poll tax? Is there not a more serious charge than the humiliation of the Secretary of State to be laid at the Government's door today? It is that there is a lack of integrity in the Government. The two Ministers should resign.

Mr. Lang: I have not the slightest doubt that my hon. Friends, who, like myself, would not have been happy with any return to domestic rates, recognise the virtues of the new local tax. It should be seen not only in the context of the tax itself, with its two components of personal and property tax, and with the provision that we intend to ensure that local authorities can never again ride roughshod over local residents and raise the burdens on them to unacceptable levels, but against the background of the substantial step change in the funding of local government from local government to central Government, with a far more substantial contribution coming from the United Kingdom taxpayer. That keeps


down the overall level. Once that has been achieved, the rest of the debate can be conducted in a far more sensible and balanced context.

Mr. Thomas McAvoy: My hon. Friends have made enough points about the poll tax and we have seen the Secretary of State struggle to answer those points. On the structure of local government in Scotland, does the Secretary of State recall that his party, when in government, took away the local council of Cambuslang and Rutherglen in my constituency? The Secretary of State has mentioned that he will take a flexible approach to the proposed restructuring and that he will concentrate on one tier. He has also said that he favours those one-tier authorities reflecting boundaries with which the communities within them can identify. Will he give me an assurance that if I can show that the people of Cambuslang and Rutherglen have an overwhelming demand for the restoration of a council of their own, and bearing in mind his remarks about local community identification, he will consider and introduce proposals for such a council?

Mr. Lang: I congratulate the hon. Gentleman on his courage. He, at least, is prepared to break ranks with his Front Bench.

Mr. John McAllion: rose——

Mr. Lang: I see another candidate coming up. The hon. Member for Glasgow, Rutherglen (Mr. McAvoy) is at least prepared to enter into consultation and to advance the case for what he believes to be the right local government solution in his area. I welcome his participation in the consultation and I guarantee to give full weight to his views.

Mr. McAllion: Why has Scotland, having been the first to get the poll tax, been the last to be told in the House about the fate of that tax? Faced with a choice between outraging the right wing of the Tory party by abolishing the poll tax and outraging the Scottish people by not abolishing it, the Secretary of State has managed to incur the anger of both by opting for his own two-tax solution—a roof tax for the house and a poll tax for those who live in it? Is that not the end product of monumental Government panic and does it not underline the fact that when the Government finally find the courage to face the only motion of confidence that matters-a general election—they will face certain, overwhelming and deserved defeat?

Mr. Lang: We are the last to tell the House about the proposals for ending the community charge because I am junior to the other Cabinet Ministers—[Interruption.] If the Labour party helps, as I believe that it will, in the return of a Conservative Government, in a few years I shall be a bit higher up the pecking order and the hon. Gentleman will not have to wait so long.
The hon. Gentleman talks about our new proposals creating anger. My feeling is that they have been broadly welcomed by a broad spectrum of people. The only anger and despondency that I see is in the faces of Opposition Members who know that they have little chance of winning an election for a long time.

Mr. William McKelvey: One would think that, after more than 11 years as a Member of Parliament, nothing would surprise me but I am astonished—nay, flabbergasted—that the Secretary of State for Scotland can come to the Dispatch Box, having done not a U-turn but several acrobatic somersaults, to make, without humility or embarrassment, a statement about the supposed removal of the poll tax in Scotland. It is a disgrace that he has the unmitigated gall to come to the House and not make more than an apology to the people of Scotland. We told him and his colleagues when they introduced the poll tax—and his English colleagues marched through the Lobby without even understanding or caring to understand what the poll tax meant, and then inflicted it on the people of Scotland—that it was obnoxious and unwanted. The Government refused to consult on the matter and entirely ignored the results of what little consultation they carried out.
I hope that I have got this right. The Secretary of State said that he wanted to change from a two-tier system of local authorities to a one-tier system because the two-tier system
blurs lines of accountability, and it can lead to duplication, conflict and delay. It is often perceived as unnecessarily bureaucratic and remote from local needs.
He then told us that he intended to change from a one-tier tax to a two-tier tax. Do not the same words apply? If the Secretary of State was consistent——

Mr. Speaker: Briefly, please.

Mr. McKelvey: I am trying to be brief, Mr. Speaker. You know that brevity is my hallmark.
I must comment on the Secretary of State's performance. Had he been an Olympic acrobat performing for Scotland, he would have picked up the gold, the silver and the bronze for the alacrity that he showed in turning somersaults. Will he not be honest with the people of Scotland and say that he does not believe that the poll tax should go? Should not he and his ministerial colleagues resign and make way for the real author of the document?

Mr. Lang: The only thing that is blurred is the hon. Gentleman's comprehension of what I said about the tax. It will be a single local tax with two components. I welcome what I take to be his support for the abolition of the community charge.

Mr. Calum MacDonald: One of the few commitments that the Government have been willing to make this afternoon is that, under the new two-tax system, the poll tax register will go. The Secretary of State for the Environment said that repeatedly, and I take it that the Secretary of State for Scotland agrees with him. Having made that commitment, the Government must have some idea of an alternative means of tracing the number of adults in a household. Will the Secretary of State give us some idea—I do not expect details—of how the Government will keep track of the number of adults in a household if they do not have a register?

Mr. Lang: Clearly, there will have to be some kind of register, as there is with any kind of local tax. We shall consult on the precise form when we publish our consultative document. I hope that the hon. Gentleman will offer us his views.

Mr. George Galloway: The Dalai Lama obviously got it wrong in thinking that he was the


reincarnation of the Buddha as the Dalai Walker from Tayside, North is clearly the fount of all wisdom on this earth. Now that the poll tax law has been seen to be an ass, can the Secretary of State find it within himself to congratulate the people of Scotland, who showed more wisdom than the politicians? Some of them argued that the only way to get rid of the poll tax was to have a general election, and that nothing could be done until there was a general election. Those Scots who marched, petitioned and protested, and some of whom withheld their tax in an act of civil disobedience, are the people who have destroyed the poll tax mark 1, as has been announced this evening.
We have heard about the tax mark 2. It is a tax on heads but not a poll tax, and a tax on roofs but not a property tax. It is a tax that dare not—at least this evening, and until there has been a lot of consultation—speak its name. When shall we know the real truth about what is to replace the poll tax mark 1? Will we know before the local elections in England and Wales in May? Will we know before a general election in June, or is that another trick to be pulled on the Scottish electorate?

Mr. Lang: I have already given the likely timetable for consultation on our consultative document. I will find it in my heart to congratulate the hon. Gentleman when he finds it in his heart to pay his fair contribution to the funding of local government.

Dr. Norman A. Godman: While I have long been an advocate of single-tier local authorities in Scotland, with the retention of the islands councils, and a local tax, I am deeply distrustful of the Secretary of State's words. The one word that he has used more than any other is "consultation". He should tell that to our fishermen, those employed in the national health service, and the representatives of my local authority who have been most badly treated over the implementation of the RENAVAL programme, which is designed to help the unemployed in areas such as mine which are characterised by scandalously high unemployment.
I remind the Minister that consultation is defined in the Oxford and Chambers dictionaries as, inter alia, deliberation, taking counsel together and consulting with others. I do not believe that these Ministers will take counsel in a sensible, humane and fair-minded way with the representatives of local authorities. Is there to be a supervisory body, based in Edinburgh, over the new system of further education? Will that supervisory body be filled, as with many other quangos, by Conservative party supporters and members?

Mr. Lang: I see no need for the kind of body that the hon. Gentleman is suggesting. We are giving each further education college, under its college council, the independence to run its own affairs. Labour Members may find that concept hard to accept, but it is the best way to generate the best kind of motivation in the minds and attitudes of those who run colleges, and to get the best results for local industry.
As for consultation with local authorities, I shall be meeting the Convention of Scottish Local Authorities tomorrow. That will be, I hope, the first of a number of opportunities to consult. Consultation is an important part of this exercise and I hope that the hon. Gentleman will be as willing to enter into it as he is for me to do so.

Mr. James Wallace: It is clear from what the Secretary of State has said in reply to a number of questions that the detail of his proposals is still to be fleshed out. He also said in reply to one question that he will confidently put this tax before the electorate as part of the Conservative platform at the next general election. How much detail does he expect to be fleshed out by the time that happens?
As I understand it, the Secretary of State is proposing free-standing colleges, which will have their own buildings, equipment and land. How does he propose to deal with further education in Orkney, where the further education facility is fully integrated with the Kirkwall grammar school?

Mr. Lang: Orkney has a habit of being a special case. Apart from anything else, it managed to collect 105 per cent. of its budgeted revenue under the community charge in the first year of operation—a wonderful example to other local authorities in Scotland.
As to the particular circumstances of the Orkney further education college, which shares its premises with a secondary school, that is a special situation to which we shall have to apply special arrangements. I shall keep the hon. Gentleman posted on developments there as early as I can. As to how much detail we shall be able to spell out in a general election, the hon. Gentleman is tempting me to answer a question that is not within my power to answer, but he must watch this space.

Mr. Patrick Cormack: I thank you, Mr. Speaker, for calling an English Member of a United Kingdom Parliament, and one who always opposed the poll tax and did not support its introduction in Scotland when the Bill to set up the system was introduced in the last Parliament. I congratulate my right hon. Friend on his part in the demise of that unfortunate fiscal enormity. I hope that the consultations, although widespread, will not be too long and drawn out. Can my right hon. Friend give us some idea of when he hopes to complete them?

Mr. Lang: The timetable may differ slightly north and south of the border. We shall consult on the tax itself in tandem with my right hon. Friends the Secretaries of State for the Environment and for Wales. It is clear that south of the border a rather longer timetable is contemplated for consultation on the structure of local government. The problem is rather more complex than that which we face in Scotland. Our consultation process may be somewhat shorter in Scotland, but I do not intend that it should be too short because local government is an important issue on which we are anxious to gain as wide a view as possible.

Mr. Harry Barnes: The severely mentally handicapped do not pay under the current poll tax arrangements. Under the new provisions, will they have to pay the poll tax element, the property element and the 2·5 per cent. increase in VAT?

Mr. Lang: The tax is a single tax in which the components of property and the personal element are combined. Whether the severely mentally handicapped will be expected to pay is clearly a matter on which consultation will be necessary. However, the hon. Gentleman will be well aware of the sympathetic approach that we adopted in our handling of the community charge.

Mr. Tony Worthington: The statement has shown how inappropriate the House is for dealing with such matters. We have attempted to deal with the three important topics—abolition of the poll tax, the structure of local government, and further education in Scotland—in a short period.
I have some specific questions for the Secretary of State, first about further education. The proposed measures have nothing to do with further education. They have arisen out of the poll tax panic and the need to move more services to centralised control. I cannot understand why the Secretary of State cannot see that he is centralising rather than localising control. Will he confirm that all the important decisions on further education will be made by him in the Scottish Office? That is particularly distressing because the Government's recent record on training is entirely one of cuts. Only local government has managed to safeguard training by not making the cuts that the Scottish Office has made with the establishment of the new local enterprise companies.
Exactly what will happen when decisions are made? Will there be no consultative body or funding council for further education in Scotland, as there is in England? Will decisions simply be the diktat of the Secretary of State?
In the English statement it was announced that a joint White Paper would emerge from the Department of Education and Science and the Department of Employment on the 16 to 19 age group. May I have a specific answer on that? What will be the relationship of Scotland to that White Paper? Will we have a link with it? It is disturbing that the statement and the few words that we have had on further education refer only to further education for the 16 to 19 group. But FE colleges are of enormous importance to their local communities, not only for vocational education. Will the Secretary of State give an assurance that the wider role of colleges in adult and continuing education will be respected?
Throughout his statement, why did the Secretary of State extol the virtues of consultation but fail to mention consultation with FE colleges? Why has he gone headlong into introducing regulations at midnight tonight, with no consultation with FE colleges?
Lastly, may I ask the Secretary of State—[Interruption.] These are my final questions. I now come to the poll tax. Will the Secretary of State devote some time—as long as he wishes—to explaining the difference between the rates and his proposed property tax? Will he also confirm that he said that there would be some sort of separate register for levying the poll tax and a valuation roll to assess the property tax?

Mr. Lang: No, that is not what I said. To answer the hon. Gentleman's other points first, far from a poll tax panic on this side, I discern panic on the Opposition Benches. The hon. Gentleman asked me several questions about further education and local control. He asked whether I would take all the decisions. I assure him that on this side of the House we believe in devolving decision making wherever possible. That is why we set up the new college councils and brought the private sector into them. That is why we are proceeding to give them the independence that so many of them want—he asked about consultation—so that they can better run their affairs.
I shall consider the precise funding mechanism that I shall use, but the central institutions in Scotland are perfectly adequately funded so it may not be necessary to establish a Scottish funding council. The hon. Gentleman asked whether there would be a link between me and the other Departments involved in producing the White Paper. I shall certainly be fully associated with that White Paper.
The hon. Gentleman asked what was the difference between the rates and the property tax. Rates are the policy with which Opposition Members are concerned. Property is but one component of the new local tax that we support. That component and the single tax are but one part of the broad package which at long last addresses simultaneously the funding, function and structure of local government in Scotland. I believe that it will deliver a solution which gives us improved local government in Scotland and will be widely welcomed by the Scottish people.

Business of the House

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): With permission, Mr. Speaker, for the record, I should like to make a statement about the business for next week.

MONDAY 25 MARCH—Conclusion of the debate on the Budget statement.
Money resolution relating to the Community Charges (General Reduction) Bill.
Third Reading of the War Crimes Bill.
TUESDAY 26 MARCH—Timetable motion, followed by proceedings on the Community Charges (General Reduction) Bill.
WEDNESDAY 27 MARCH—Debate On the Opposition motion of no confidence in Her Majesty's Government.
Motion relating to the British Nationality (Fees) (Amendment) Regulations.
THURSDAY 28 MARCH—Debates on the motion for the Adjournment.
The House may be asked to consider any Lords amendments which may be received.

It may be for the convenience of the House if I indicate that the business for the first week after the Easter Adjournment will be as follows:

MONDAY 15 APRIL Remaining stages of the Export and Investment Guarantees Bill.
Motion relating to the Testing in Primary Schools (Scotland) Regulations.
TUESDAY 16 APRIL—Remaining stages of the British Technology Group Bill.
Motions on the Scottish Legal Aid orders. Details will be given in the Official Report.
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
WEDNESDAY 17 APRIL—Opposition Day (10th Allotted Day). There will be a debate on an Opposition motion, subject for debate to be announced.
Motions relating to Personal Community Charge (Reductions) (England) Regulations. Details will be given in the Official Report.
THURSDAY 18 APRIL—There will be a debate on agriculture on a motion to take note of EC documents, details of which will be given in the Official Report.
FRIDAY 19 APRIL—Private Members' Bills.

Mr. Speaker, the House will also wish to know that European Standing Committees will meet to consider European Community documents as follows:

TUESDAY 26 MARCH at 4.30 pm—Committee B Document No. 4345/91 relating to relief of ACP debt to the Community.
WEDNESDAY 27 MARCH at 10.30 am—Committee A Document No. 7214/90 relating to protection of animals during transport.
WEDNESDAY 27 MARCH at 10.30 am—Committee B Document No. 9908/90 relating to third EC equal opportunities action programme for women and men.
WEDNESDAY 17 APRIL at 10.30 am—Committee B Document No. 8353/90 relating to customs controls on baggage.

[Tuesday 26 March

European Standing Committee B:

Relevant European Community Document


4345/91
Relief of Debt of African, Caribbean and Pacific (ACP) States

Relevant Report of European Legislation Committee HC 29-xiii (1990–91)

Wednesday 27 March

European Standing Committee A:

Relevant European Community Document


7214/90
Transport of Animals

Relevant Reports of European Legislation Committee

HC 11-xxxi (1989–90) and

HC 29-iii (1990–91)

Wednesday 27 March

European Standing Committee B:

Relevant European Community Documents

(a) 9908/90
Equal Opportunities for Women and Men


(b) Unnumbered

Relevant Reports of European Legislation Committee

(a) HC 29-vii (1990–91)
(b) HC 29-vii (1990–91) and HC 29-xv (1990–91)

Wednesday 17 April

European Standing Committee B:

Relevant European Community Document


8353/90
Customs Controls on Baggage

Relevant Report of European Legislation Committee HC 29-i (1990–91)

Thursday 18 April

Floor of the House:

Relevant European Community Documents


(a) 4549/91
Common Agricultural Policy: Development and Future


(b) 5032/91 + ADD 1–3
CAP Price Proposals 1991–92


(c) Unnumbered
Export Refunds (Court of Auditors' Special Report No. 2/90)


(d) 6672/90
Agricultural Fraud Counter-Measures


6649/90
Community Rules (Checks and Penalties)


(f) 7320/90
Rural Development Initiatives

Relevant Reports of European Legislation Committee

(a) HC 29-xii (1990–91)
(b) HC 29-xv (1990–91)
(c) HC 11-xxvii (1989–90)
(d) HC 11-xxv (1989–90)
(e) HC 11-xxvi (1989–90)
(f) HC 11-xxx (1989–90)

Tuesday 16 April

SCOTTISH LEGAL AID ORDERS

1. Advice and Assistance (Scotland) (Prospective Costs) Regulations
2. Civil Legal Aid (Financial Conditions) (Scotland) Regulations
3. Advice and Assistance (Financial Conditions) (Scotland) Regulations

Wednesday 17 April
1. The Personal Community Charge ( Reductions) ( England) Regulations (1991 No. 230)
2. The Personal Community Charge ( Reductions) (England) (Amendment) Regulations (1991 No. 352).]

Dr. John Cunningham: Why has the Leader of the House created yet another precedent by asking the House to agree on Monday night the money resolution for the poll tax Bill on Tuesday? The House does not approve money resolutions before the Bills to which they relate have had a Second Reading. Before the Leader of the House cites the Prevention of Terrorism Act 1974 as a precedent, may I tell him that I hope he will not equate the crisis in the Conservative party over the poll tax with a national security crisis that arose because of IRA bombing in 1974? On that Act the money resolution was the subject of general agreement through the usual channels. The Prevention of Terrorism Act was not guillotined, and in those exceptional circumstances the money resolution was taken first. It would be shameful for the Leader of the House to use that precedent of a national emergency as justification for taking the money resolution for the poll tax Bill before Second Reading.
The right hon. Gentleman has the ignominious reputation of having created two unsavoury parliamentary precedents, one on the money resolution itself and one on the guillotining in advance of a Finance Bill to replace most of an Act of Parliament which took months to put on the statute book and created hundreds of anomalies because of the capricious nature of the poll tax. That Bill is to be steamrollered through all its stages in just seven hours.
Will the Leader of the House confirm that he intends to keep the House waiting through the night of Wednesday/ Thursday next week to consider any Lords amendments to this invidious procedure? The Government will look even more stupid if they keep the House sitting for potential amendments to a Bill that seeks to introduce the Government's new twin tax—a property tax and a poll tax with a VAT surcharge riding on its back. That is no way to conduct serious matters of government. It would be far better for the Leader of the House to announce a proclamation for a general election so that people might decide on these matters rather than ramrod them through the House.
When the House resumes after the Easter recess—which seems inordinately lengthy when viewed alongside the panic-stricken activities of the Government and the poll tax Bill to be debated next week—will the right hon. Gentleman find an early opportunity for a debate on criminal justice? People in all political parties were shocked by the revelations about the deep and fundamental failures of our criminal justice system following the release of the Birmingham Six.

Mr. Ivan Lawrence: rose——

Dr. Cunningham: I should have thought that the hon. and learned Member for Burton (Mr. Lawrence), who practises at the Bar, would have been one of the first to recognise the need for such a debate.

Mr. Lawrence: I am grateful——

Mr. Speaker: Order.

Dr. Cunningham: The hon. and learned Gentleman need not be grateful to me because I am not paying him any compliments.
There is widespread dismay and concern about these matters, and it would be appropriate for the House to have an opportunity to debate them, although not in a party-political way because we know that such events have a long history. The Leader of the House would go some way towards restoring his tarnished reputation if he found time for such a debate.

Mr. MacGregor: The hon. Gentleman's remarks about a general election were rather stale and somewhat irrelevant. He asked about the money resolution. The way in which we propose to deal with that is for the general convenience of the House and is procedurally in order. I explained on Tuesday that we needed to get the Bill next week because that is to the advantage of local authorities and community charge payers. We shall be interested to hear in next week's debates and in the debate on the no confidence motion the view that the Opposition now take of the Bill, because their view is far from clear.
The Opposition are entitled to table no confidence motions and, as always, I have arranged time for a debate. We welcome the opportunity for a debate, but I wonder what can have possessed the Labour party to engage in a debate which will cruelly expose its lack of coherent policies. As the hon. Gentleman knows, we propose to reduce the charge to local residents by £140 per person in the coming year, and to get that done quickly is our reason for proposing speed on the Bill next week. Does Labour oppose that? We propose to pay for that reduction by increasing taxes on spending. Would Labour reverse that? There is no rush because next week there will be ample opportunity to expose the deficiencies in Labour's policies.
It is a short Bill of five clauses. We have had a full day on the purposes of the Bill and on other matters today and we shall have a full day on Monday during which the matter can be further discussed. We shall also debate it on Tuesday and Wednesday because the no confidence motion seems to be related to it. That means that there is plenty of time to debate these matters.
The hon. Gentleman spoke about criminal justice. It was entirely fair of him to say that this is not a party matter but one that concerns the whole House. My right hon. Friend the Home Secretary has announced the setting up of a royal commission. I have noted the hon. Gentleman's request for a debate. I rapidly had to find time for a debate on the no confidence motion. My problem is that there is a great deal of business for the House to conduct when we return after the recess. I shall certainly bear in mind the hon. Gentleman's request.

Several Hon. Members: rose——

Mr. Speaker: Order. In consideration of hon. Members who wish to participate in the Budget debate, let me say that questions to the Leader of the House should be directed strictly to next week's business. Most hon. Members who wish to do so have asked questions on the other statements.

Mr. Michael Jopling: I was about to apply myself to today's problems because I suppose it is many years since we had statements which lasted until about 9 o'clock. Can my right hon. Friend the Leader of the House find some way to facilitate those of us


who wish to speak on the Budget? Could he find a way to extend beyond 10 o'clock the business on the third day of the Budget debate? I cannot think of a way to do that, but my confidence in his ingenuity is so great that perhaps he can think of one.

Mr. MacGregor: I understand my right hon. Friend's frustration. As he knows, there is no procedural way to do what he suggests. The best contribution that I can make is to keep my answers extremely short.

Mr. James Wallace: No doubt the Leader of the House will recall that in November, when we last had a no confidence motion, Conservative Members were somewhat divided on the question of leadership. The result of the debate was a nauseating display of unity among Tory Members. Exchanges today have shown that divisions are again occurring. What does the right hon. Gentleman divine to be the tactics of the Leader of the Opposition on this occasion?

Mr. MacGregor: I recall that occasion, and there was complete unity on this side of the House, as there will be on Wednesday. For the second time in a short period, Opposition Members will fall flat on their faces.

Mr. Peter Bottomley: Does my right hon. Friend agree that, if the Government had not come forward with £140 for each community charge payer, there would not be a no confidence motion? Perhaps next week the Labour party will explain why the extra help to those that they claim to represent causes it to say that the Government have got it wrong rather than that the Government have got it right.

Mr. MacGregor: The Opposition will have a great deal of time next week to explain that and to answer questions about their proposals which have not yet been answered.

Mr. Geoffrey Lofthouse: Will the Leader of the House arrange for the Home Secretary to come to the House next week to make a statement about a serious situation that has developed in the west Yorkshire police? Is the right hon. Gentleman aware that there is great worry in west Yorkshire about the fact that the criminal fraternity is well in advance of the police on new technology? Is he also aware that criminals in that area were buoyant last week when they saw an announcement from the police authority that, as well as having lost 500 policemen on the beat, it is now unable to fill the vacant post of assistant chief constable? The Home Secretary is obliged to come to the House and tell us why he is not forcing the Department of the Environment to allow that authority to fill the post in accordance with the Home Secretary's criteria.

Mr. MacGregor: I shall draw that point to the attention of my right hon. Friend, but it is impossible to fit in a statement of that sort next week.

Mr. James Lamond: Remembering that the right hon. Member for Chingford (Mr. Tebbit), when Secretary of State, used to delight in coming to the Dispatch Box to announce new jobs that had been established—for instance, 400 jobs in a motor manufacturing plant—is there any chance that next week the appropriate Secretary of State will come to the Dispatch Box, perhaps on Tuesday when there is a lobby on the matter, to explain what help the Government think

that they can give to the more than 3,000 workers who have been laid off by British Aerospace, including 675 at the Chadderton plant in Oldham? Can they look to the Government for any help in their difficulty?

Mr. MacGregor: As the hon. Gentleman may know, the company has said that it took the measures that it announced this morning to protect the long-term future of the business. It said that it is imperative that it achieves further improvements in operating efficiency if it is to maintain its competitive position in the world market.
On the commercial side, the company has quoted the effects of world recession, the weakness of the United States dollar and the continued price pressure on air fares as grounds for the need to reduce costs. I am afraid that I see no cause for a statement next week on this matter.

Mr. Patrick Cormack: Is my right hon. Friend aware that there will be not only unanimity among Conservative Members next week but relief, gratitude and enthusiasm in equal measure?

Mr. MacGregor: I am grateful to my hon. Friend.

Dr. Jeremy Bray: Is the right hon. Gentleman aware that since his last business statement the Select Committee on Trade and Industry has published its report calling for an early debate in the House on the closure of Ravenscraig, and that since the report was completed the situation has further deteriorated, with the closure of another blast furnace? Do the Government intend to find time for an early debate, given that the right hon. Gentleman has already announced today that the Government are bringing forward the remaining stages of the British Technology Group Bill after Easter? Is he aware that in Committee Ministers undertook to carry out certain consultations and that it is unlikely that they will be completed by then? Could the business perhaps be delayed?

Mr. MacGregor: I certainly do not want to delay the business, but I shall draw the hon. Gentleman's point about the remaining stages of the Bill to the attention of my right hon. Friends.
The Government are carefully considering the Select Committee's report, including its recommendation of an early debate, and we will respond to it in the usual way.

Mr. Tom Cox: Is the Leader of the House aware that earlier this evening television interviews were held with the leaders of Conservative authorities who expressed deep disgust with the statement made by the Secretary of State for the Environment? If there is to be confidence in local government on the part of those who serve in it and of the public who look to it to provide services, is it not time that we had a much fuller statement on what is to replace the poll tax instead of the airy-fairy statements that we have heard today?

Mr. MacGregor: I did not see the interviews because I have been sitting in the Chamber for some hours waiting to make this statement—so I have heard some pretty full statements from my right hon. Friends on the subject.

Mr. Max Madden: On the "Poll Tax (Panic and Bribery) Bill" next Monday and Tuesday, I assume that the money resolution will be open-ended. Presumably the Secretary of State will deal with it, because


we shall want a great deal of detailed information, especially about whether people in receipt of rebates and transitional relief will receive some or all of the £140.
I assume that the guillotine motion on Tuesday's business can be debated for a long time and may therefore eat into the debate. Therefore, can the debate be extended to midnight to give us a minimal opportunity of debating this attack on parliamentary democracy, and so that the Secretary of State can answer many of the questions that he was clearly unable to answer this afternoon?

Mr. MacGregor: It is ridiculous to describe this as an attack on parliamentary democracy. We are trying to get the measures through the House—allowing a reasonable amount of time for them, given that it is a small Bill—to help community charge payers and local authorities.
The money resolution will be proceeded with in the same way as such resolutions always are. The timetable motion on Tuesday will proceed similarly. It will be published and on the Order Paper tomorrow.

Mr. Nigel Spearing: Is the right hon. Gentleman aware that the debate in European Standing Committee A next Wednesday may be the last opportunity that the House has to discuss the controversial order to do with the export of live horses, a subject about which many Members have received a great deal of correspondence? Does he recall that the Prime Minister gave an undertaking to my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) that there would be reports relating to the intergovernmental conferences on monetary and political union in the Community? Can he assure us that after Easter the House will be given a verbal statement after those Council meetings, and that the Government will not rely on scrutiny by Select Committees such as the one that is to meet next Monday?

Mr. MacGregor: I shall consider the hon. Gentleman's second point. As for his first, I agree about the importance of the document relating to the protection of horses during transport. Like many colleagues, I have received voluminous mail on the subject and I am sympathetic to those who have written to me. The Government's position has been made clear: we are endeavouring to achieve all the safeguards that we require. It would be possible to raise this matter on the Floor of the House during the agriculture debate in the week we come back.

Dr. Norman A. Godman: I believe that the Leader of the House said that European Standing Committee B is to meet twice next week. As someone who was appointed to that Committee with no consultation—I do not know what parliamentary crime I committed that I should have been put on it—I remind the right hon. Gentleman that on 22 January he said, among other things:
It seems likely that each Standing Committee will have about two sittings per month."—[Official Report, 22 January 1991; Vol. 184, c. 271.]
Yet we are meeting weekly, and now there are to be two meetings a week. May we have an early statement on the frequency of these meetings or perhaps on an increase in the number of Committees? I am asking for a break.

Mr. MacGregor: Someone else will have to explain what crime the hon. Gentleman committed to cause him to serve on the Committee. As I have often said, I am keen to review the workings of these Committees as we get more experience of them. They have not met at all in some weeks. One of the issues, as it was when EC documents were scrutinised in the previous system, is that the timetable is not entirely in our hands because it depends on what business is coming up in the Community. One step that we have taken to assist members of the Committee is to give them as much notice as possible of when it will meet—usually longer notice than in the statement that I made to the House. I am certainly prepared to look into whether there should be more members and into other issues that may arise once we have more experience of the working of the Committees.

Mr. Tony Banks: I do not know whether the Leader of the House missed me during questions on the last couple of business statements, but he may be interested to know that I was in Canada studying baby harp seals which used to be clubbed to death, rather in the same way as the Government are clubbing democracy to death in Parliament. He will be aware that the killing of these baby seals ended as the culmination of a political campaign in the House and in the European Parliament, which forced the Canadian Government to impose a ban. It now looks as though that Government may be considering allowing an extension of seal culling, so I ask the right hon. Gentleman whether we can have a debate, if not next week, as soon as possible thereafter, on animal conservation. It is a matter of great concern to many Members in the House and to many more people outside it. In such a debate we could discuss the Canadian seal cull along with many other matters relating to animal welfare.

Mr. MacGregor: I had not realised that one of the qualities of the hon. Member for Newham, North-West (Mr. Banks) was arrogance. I shall puncture his arrogance and say that I did not miss him during the past two business statements.

Mr. Banks: Cutting.

Mr. MacGregor: I apologise for cutting the hon. Gentleman.
On the serious business that he raises, I was not aware of such a development. There may be other ways in which the issue can be raised in the House, but I shall bear in mind what he said.

Mr. Harry Barnes: The Community Charges (General Reduction) Bill that affects all of our constituents will not be published until after this question has been answered. That means that many hon. Members who have already left for various reasons will be unable to gain ready access to it. What avenues are available to introduce amendments to such a significant Bill, which will be dealt with in the House in very inadequate circumstances on Tuesday?

Mr. MacGregor: I am sure that hon. Members who are sufficiently interested in tabling amendments will have arranged to obtain copies of the Bill. The normal arrangements for dealing with amendments will apply in this case.

Easter Adjournment

Mr. Speaker: I remind hon. Members that, on the motion for the Adjournment of the House on Thursday 28 March, up to nine Members may raise with Ministers subjects of their choice. Applications should reach my office by 10 pm on Monday next. A ballot will be held on Tuesday morning and the result made known as soon as possible thereafter.

BILL PRESENTED

COMMUNITY CHARGES (GENERAL REDUCTION) BILL

Mr. Secretary Heseltine, supported by the Prime Minister, Mr. Chancellor of the Exchequer, Mr. Secretary Newton, Mr. Secretary Hunt, Mr. Secretary Lang, Mr. Michael Portillo and Mr. Robert Key, presented (under Standing Order No. 48 (Procedure upon Bills)) a Bill to make provision for, and in connection with, a reduction in the amounts of community charges for the financial year beginning on 1st April 1991 and the payment of grants to charging authorities in England and Wales and local authorities in Scotland: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 120.]

Orders of the Day — WAYS AND MEANS

Order read for resuming adjourned debate on Question [19 March].

Orders of the Day — AMENDMENT OF THE LAW

Motion made, and Question proposed,
That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance, but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting any supply;
(b) for refunding any amount of tax, otherwise than by virtue of goods or services supplied to one person being treated for the purposes of section 14(3) of the Value Added Tax Act 1983 as supplied to another person;
(c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or
(d) for relief other than relief applying to goods of whatever description or services of whatever description.—[Mr. Norman Lamont]

Question again proposed.

Orders of the Day — Budget Resolutions and Economic Situation

Mr. Speaker: In view of the delayed start of the debate, I am grateful to the Front-Bench spokesman for saying that they will limit their speeches to 15 minutes each. I understand that the wind-up speeches will be five minutes each to enable hon. Members who have been waiting patiently to speak to do so. I ask them, too, to tailor their speeches to about 10 minutes.

The Secretary of State for Employment (Mr. Michael Howard): At last we come to the event for which I know the whole House has been waiting throughout this long day.
In his Budget speech my right hon. Friend the Chancellor of the Exchequer set out the three essential foundations for the renewed growth in jobs that we all want to see. First, the prospect is for sharply falling inflation—down to 4 per cent. in the last quarter of the year, and even lower in 1992. Secondly, interest rates are coming down—a reduction of two full percentage points since last October. Thirdly, my right hon. Friend predicted that output would stabilise in the next few months and then grow again—by 2 per cent. between the first half of this year and the first half of 1992.
In short, while the immediate prospect is for rising unemployment, the basis is already laid for a resumption in the jobs growth that has been such a remarkable feature of the second half of the 1980s; and for falling unemployment. How quickly unemployment comes down will depend partly on the speed with which pay settlements come down. The latest figures show a small fall in year-on-year average earnings, but that is not enough and it is not happening quickly enough.
Within the exchange rate mechanism, wage negotiators ultimately have no option, if they want to remain competitive, but to bring unit wage costs into line with those of our European competitors. If that lesson is not


learnt, more jobs will be lost. In that context, I particularly welcome the measures announced in the Budget to encourage more profit-related pay schemes and to stimulate employee share ownership.
The Government have always attached considerable importance to the financial participation of employees in the companies for which they work. One of the most effective ways of increasing commitment at work is to give employees a direct stake in the ownership and prosperity of the business for which they work. Tax reliefs to stimulate financial participation have been introduced or extended in almost all Budgets since 1979. A number of proposals in the latest Budget continue this process and take financial participation still further.
Those proposals are further evidence of the Government's commitment to financial participation as an important element in employee involvement. They will provide an important strengthening of the links between the rewards people receive and the performance of the company for which they work. They are important further steps on the road to making our pay and rewards systems more responsive to profitability.
However, although the medium-term prospect for jobs is optimistic, I do not underestimate the anxiety and uncertainty of those who are unemployed at the present time about how long they will be unemployed and how quickly they can get back to work. While unemployment remains high, I am determined to ensure that those unemployed people have the best possible advice and support and, where necessary, special help to put them on the road back to a job.
As a result of the measures that I announced a year ago, we already have in place throughout the country a comprehensive package of counselling and job-search advice geared to the specific needs of individuals. The central feature of those measures is an initial interview for all newly unemployed people and an individual back-to-work plan showing how that person can best help himself and how he can be most effectively helped by the employment service.
I announced yesterday that I propose to build on that new counselling framework extra advice and help with job search. I am providing the employment service with £55 million in extra resources for 1991–92 on top of the resources already announced. Of that, some £38 million will ensure that its standards of service to its clients are maintained and, where possible, enhanced. Some £17 million will provide more help for those who do not find work in the first few weeks of unemployment.
As a result, for the first time, every unemployed person who reaches 13 weeks of unemployment and has no job to start will have a guaranteed offer of an interview—an opportunity to review the back-to-work plan and to assess further options for getting back to work.
New jobs teams will be set up to search out jobs that are suitable for those who have marketable skills and to match individuals to jobs.
Jobs seminars will be run to provide extra advice on job search for those who are not seeking work in the most effective way. For those with more intensive problems and needs, who are already eligible to enter job clubs after 13 weeks of unemployment, more job club places will be provided.
We are also increasing help to those who have been unemployed for a longer period. In the course of the next financial year, there will be an extra 100,000 opportunities in job clubs and in the new job introduction guarantee scheme. Job clubs work: 66 per cent. of unemployed people leaving job clubs go into work or into training or further education.
Finally, as a result of the further £120 million that I am making available to employment training, up to 245,000 unemployed people will be able to learn skills to improve their chances of getting back to work. That represents the most comprehensive range of help and advice ever made available to unemployed people. It offers some 650,000 opportunities on Employment Department programmes. It provides a wide range of options, so that the available help matches individual needs. It guarantees help to unemployed people at the point at which they need it most. Above all, it focuses on jobs and getting back to work.
Even at a time of rising unemployment, some 450,000 job vacancies are available in the economy now. Almost 300,000 unemployed people leave unemployment every month. Over 50 per cent. of unemployed people find work within three months of becoming unemployed. The help that we are providing and the new help that I have announced today is designed to ensure that everyone has the best possible chance of getting back to work in the shortest possible time.
May I now turn to one of the most significant parts of the Budget speech: that concerned with initiatives to encourage individuals to invest in their own training. It is of particular importance at a time of economic downturn that we do everything possible to sustain both employer and individual investment in training, so that, as jobs are created, there is a ready supply of skilled people.
The foundations have already been laid for a significant improvement in the skills of the work force. There are many positive signs that skill levels are increasing, and that employers and individuals are becoming increasingly aware of the importance of education and training to our future economic well-being. I draw the attention of the House to the clear signs of that improvement.
First, more and more young people, encouraged by the Government's reforms to schools and the further education system, are staying on in full-time education to gain the qualifications that will enable them to progress to higher levels of skill and attainment. Last year, 350,000 16-year-olds chose to continue in full-time education; the percentage staying on has risen by a third over the past decade. The number of young people taking part in full-time vocational courses in further education is also increasing: in England it has doubled in the past 10 years.
The second clear sign is the success of youth training. The Labour party has a consistent record of opposition to youth training and to the YTS which preceded it. The hon. Member for Sedgefield (Mr. Blair) made a speech in January which set out Labour's supposedly superior alternative to youth training. But, as ever, he had failed to notice what was happening around him. He said that training for young people should lead to jobs or further education and training. Youth training already does that: 88 per cent. of young people who complete their YT course go into jobs, further education or training. He said that training should be based on national vocational qualifications attained, not on time served. Youth training already provides that too: there are no time limits on the training involved, and there is a minimum target level of a


national vocational qualification level 2. Already, two thirds of those who complete YT gain a vocational qualification—something which was inconceivable 10 years ago. That number will increase in future as training and enterprise councils ensure that all the training they provide for young people leads to a national vocational qualification.
The hon. Gentleman called for closer integration of education and training. That is also already happening—through the technical and vocational education initiative, through education business partnerships and through the assumption from next month of responsibility for work-related further education by TECs.
The third clear sign of the improvement in Britain's training performance is that the number of employees receiving job-related training has increased by 85 per cent. since 1984—a remarkable testament to the new commitment of employers to upgrading the skills of their employees. The depth of that commitment is underlined by the results of an Industrial Society survey published only this week. Despite the difficult economic conditions, 87 per cent. of companies say that they will either maintain or increase their expenditure on training this year—more than six times as many as those that say that they will reduce it.
Those positive trends are due in no small part to the wide range of steps that the Government have taken over the past 10 years to create an education and training system that is relevant and responsive to the needs of employers and individuals. But of course we are far from complacent; we still have much to achieve. We have set in train the reforms that will ensure that the momentum which has been built up does not diminish.
In the training and enterprise councils and the local enterprise companies in Scotland we now have the means of developing and building on this commitment to training. All 82 TECs and 22 LECs are now in being. More than 1,200 of the country's senior business men and women have committed themselves to providing the leadership needed to develop the skills that industry will need in the 1990s. That leadership has been built not by the regulation and compulsion so much favoured by the Opposition, but through voluntary commitment and willing participation.
Alongside employer commitment we must also stimulate individuals to take responsibility for their own training and development. Again, the way to do that is not by compulsion, but by providing new incentives and widening choice. We have already taken a number of steps in that direction. For 45,000 young people, in 11 pilot areas across the country training credits are only two weeks away. Training credits are a very important development. They offer real purchasing power to the individual and encourage young people to assume, at the very outset of their careers, proper control over their own training and development. If the pilots are successful, training credits will play a major part in transforming attitudes towards training in this country.
Career development loans, which were introduced in 1988, are giving valuable help to individuals who are financing their own training. They have led to a combined investment of £50 million in the training of about 17,000 individuals. Through the TECs, we are ensuring that individuals have access to comprehensive information and advice about training provision in every local area.
Finally, we have just announced an important new addition to our well-established national training awards, which give recognition for excellence in training. For the first time, the 1991 awards, for which His Royal Highness the Prince of Wales is patron, will include a new award for individual achievement.
The announcement in Tuesday's Budget of tax relief for individuals' expenditure on training provisions provides another important incentive for individuals to acquire new skills or upgrade existing ones. That sends a clear signal of the Government's support for individual effort and will provide a powerful incentive to those who wish to train, but are deterred by the cost. Tax relief will be given at source for training leading to national vocational qualifications—or SVQs in Scotland—up to and including level 4. The link to national vocational qualifications is essential. The achievement of recognised qualifications, based on standards of competence set by employers, is the best way of ensuring that people have the skills our economy needs.
These developments are all designed to give individuals the information, support and encouragement they need to improve their skill levels and widen the choices available to them. I am confident that they will have a significant impact on individuals' willingness to seek out training opportunities and take responsibility for their own training and development.
The Chancellor rightly referred to his Budget as a "Budget for business". With my special responsibilities for small firms, I take particular pleasure in the substantial additional help for small businesses. Every year my hon. Friend the Minister with responsibility for small firms invites those who represent small firms to put forward their views on what they would like to see in the Budget to assist small firms. We listen to their views and consider with the Chancellor what might be provided.
I am glad to say that this year the process has borne particular fruit with measures that further reduce the tax burden on small enterprises, lift further the bureaucracy and red tape which is the bane of a small firm's life and assist firms having cash flow and liquidity problems in the present recession. I do not propose to list again all the measures that will be of particular benefit to small firms, but I draw the attention of the House to the wide spread of measures.
There are measures which will benefit very small firms. One example is the increase in the VAT registration threshold to £35,000, an increase of 38 per cent. to its highest-ever level in real terms, which will take an estimated 150,000 traders out of the VAT net. A second example is the move from monthly to quarterly payments of PAYE and national insurance contributions for small employers, thereby improving the cash flow for about half all employers.

Dr. John Marek: I shall make a short intervention because I would like to be helpful. Would not it have been useful if postponed accounting had been introduced this year? It will have to come in next year's Budget, and it would have helped small industry if it had been brought forward to this year.

Mr. Howard: It is always possible to identify other measures, but I think that the hon. Gentleman will recognise that the combined effect of the package that my right hon. Friend introduced on Tuesday, which has been


widely welcomed by small firms' organisations, will go a long way to improving their position and relieving the burdens presently placed on them.
The increase in the threshold for the small company rate of corporation tax and the carrying back of trading losses from one year to three will be of particular benefit to the small incorporated company.
In addition to these, the Chancellor made two important announcements of concern to small firms. As the Chancellor said, there is a case for a more radical simplification of the taxation of the self-employed. The Inland Revenue will therefore shortly be publishing a consultative document outlining its proposals for change.
The Chancellor also announced a review of the serious misdeclaration of VAT penalty, because of complaints that the penalty it imposed was unfair; while the review takes place, the penalty has been reduced from 30 per cent. to 20 per cent.
The Budget will help training and businesses, especially small businesses, and will help to foster and create jobs. The Government will continue to create jobs to fuel growth and to raise the prosperity of our people. That is why we shall win the next election and many after it.

Mr. Tony Blair: This is probably the first time that an opening speech has been made at a time normally reserved for the replies. That is a telling sign of the Government's incompetence. In the midst of the worst recession for a decade, with unemployment rising and output falling, the Budget will be remembered not for what it did for the economy but for the poll tax.
The poll tax, like some virulent contagious disease, is contaminating everything with which it comes into contact; no aspect of local or central government appears immune. On Tuesday, it infected the Budget with deadly results.

Mr. Howard: rose——

Mr. Blair: In a moment, please.
From now, every time that we make a purchase—a new video, television, car, suite of furniture or clothes, buy a meal, take a holiday, go to the cinema and in every aspect of pleasure or business—we shall have a reminder in perpetuity of the most foolish measure introduced in modern times.

Mr. Howard: All the Budget did for local government finance was to shift the proportion financed locally to central Government. Is the hon. Gentleman saying that the Labour party opposes that shift, or is he saying that it would have financed it in some other way? If so, perhaps he will be kind enough to tell us how.

Mr. Blair: We would not have introduced the poll tax and be in this mess. I remind the Secretary of State that he was the Minister responsible for introducing the poll tax, but now he is going to stand on his head and tell us that he regretted it.
The Budget should have included, as we demanded, not a partial but the full restoration of the training cuts and made proper provision for a temporary work programme to assist unemployed people. Instead, the training concession, which is the only measure in the Budget on

training or unemployment, is costed at £20 million—barely one third of the extra cost of resubmitting poll tax bills after Tuesday's announcement. Can there be any clearer sign of the Government's priorities or any better proof of their failure?
The real casualties of the Budget are all too clear. Unemployment is rising faster than at any time since the early 1980s—the worst recession on record—and 370,000 people were made redundant or have lost their jobs in the past few months. Twelve thousand jobs have gone since Tuesday's Budget. Almost 100 constituencies, three quarters of which are represented by Conservative Members, have suffered a rise of more than 1,000 in unemployed people. In the south-east, unemployment has risen by 50 per cent.; in the south-west by 47 per cent.; in East Anglia by 45 per cent.; and in the midlands by more than 20 per cent. Areas such as north Wales and Scotland, where the rise has been slower, are starting to rise inexorably from a much higher base.
The recovery for which the Government have striven so hard has been put at risk. In every constituency, there are closures, redundancy and short-time working. In every affected family, there is worry about paying the mortgage, meeting household bills and, above all, about how to get back to work in a labour market that is shrinking daily.
In every part of Britain, every sector of industry and every occupation in the workplace, the recession has taken its toll and is the direct responsibility of Ministers. They say that the recession is biting worldwide, but that is palpably untrue. No main European country is set for any fall in growth in 1991, let alone to register negative growth of 2 per cent. In Japan, growth will be 3·5 per cent., in Germany 2·5 per cent., in France 2 per cent. and in Italy 1·5 per cent. In the third and fourth quarters of 1991, we will be the only main economy in the world that will suffer falls in growth.
Moreover, it is not that we are first in and first out; we are first in and last out. Growth predictions for 1992 show that we shall grow more slowly than any other OECD country. We are worse off in another respect: in 1991, business investment will grow in Japan, Germany, France and Italy but plummet by almost 10 per cent. in Britain. Billions of pounds of investment are going to German, French, and Japanese firms from United Kingdom industry. Although, as the Secretary of State said, we do not have the highest absolute rates of unemployment in Europe, we have the fastest-rising unemployment anywhere in the OECD.
Against that background, we look at the Budget and the Department of Employment. In 1989, when unemployment stood at 1·8 million, the budget for employment training was about £1·5 billion. In 1990, when unemployment stood at 1·6 million, it was well over £1 billion. In 1991, when unemployment is topping 2 million, how can the figure of £850 million—a cut of almost half what it was two years ago—possibly be justified? If the money in 1989 was barely adequate for unemployment, then how can it be adequate now when unemployment is higher? The omission from the Budget of any proper measures for the unemployed is the most telling expression of the Budget and the Government's priorities. A clear and cynical calculation has been made that 2 million or more unemployed is electorally tolerable. I do not believe that the Government are right in thinking that, but even if they


are and it is electorally tolerable, it should not be tolerated by any Government who have proper respect for the society in which we live.
Our criticism, however, is not just of the Budget's failure to announce new measures to assist the unemployed but of its failure to correct past mistakes. Even now, because of the cuts in the budget of the Department of Employment, chaos and confusion are being caused across training provision in Britain, as hon. Members must know from representations that they have received. If we have received those representations, the Department of Employment must have done so, too. Our office has been inundated with scores of complaints that in every part of Britain training schemes are closing, trainers are being made redundant and training places are being lost. Many of those places are for the most disadvantaged people in our community. For some, employment training, with all its faults, offered their only lifeline to self-improvement. Many have written to us—some from high technology schemes for the long-term unemployed, some who are handicapped and some young people whose only opportunity that was to get back into the job market.
We come to the one measure in this year's Budget that is remotely concerned with employment or training—the tax relief on training fees. Anything that assists training is welcome. The great problem with tax relief is dead weight—in other words, those gaining the tax relief may have undertaken a course anyway and many of the poorer and unskilled will be unlikely to gain by the proposals. Having said that, it is clearly right that anything that assists training deserves our support. When we put that against the scale of Britain's training deficit and realise how far behind we are, can it be said that this sole measure in the Budget that assists employment and training really faces up to the scale of the problem?
The Secretary of State said that more companies were training, and we welcome that. There are signs that they are. However, the right hon. and learned Gentleman should read the Industrial Society's report much more carefully before drawing his conclusion in quite such a black-and-white way. More companies are training in Germany, Japan and France, and to higher levels and more qualifications. The idea that they are standing still while we are catching up is nonsense. They are moving ahead, too. When we agree that Britain needs a training revolution, when we must accept that we have more unskilled employees than any other main European competitor, when we languish far behind Germany and France in skills for technicians, textile workers, shop assistants, engineers and computer programmers—almost every sector of the economy, whether services or manufacturing—and then we compensate for five years of cuts totalling £1 billion in Government funding with one tax concession worth £20 million, the notion that we are preparing ourselves adequately for the future is an affront to our common sense.
The tax concession is not unwelcome, but it is a sop—a political nod in the direction of a serious issue, made without any credible intention of addressing it. It would have been far better to adopt the proposals that the Labour party advanced in our Budget submission, not only for the restoration of money lost through training cuts and the establishment of a good temporary work programme for the unemployed, but for a new special skills fund of £300 million-adequately financed, in other

words—to allow us to provide access to those who want to obtain skills for the first time and to those who want to improve their skills.
This tax concession—this sop—reveals the nature of the present Government. They are a Government with no purpose except to be in government. They are a Government with no coherence, no commitment, no passion and no understanding of the needs of the country. A Government who were concerned for Britain in the middle of a recession would have produced a Budget for Britain—a Budget for employment and training. If the Government can find £4·5 billion to salvage the wreckage of the Tory party over the poll tax, why cannot they find £200 million to help training for the unemployed? The reason is simple: they are more concerned about the jobs of 370 Tory MPs, at risk from the electorate, than about the 370,000 people made unemployed since the recession began.
On Tuesday we had a Budget that ignored the problems of the real economy. Today we had a poll tax announcement whose shambolic incompetence defied belief. It has been a fitting end to a farcical week. Contrary to what we were told by the Secretary of State, when the next election comes, this will be remembered as the week that saw the beginning of the end not just of the poll tax and the mismanagement of our economy but of the party responsible for both.

Mr. Michael Jopling: I hope that the hon. Member for Sedgefield (Mr. Blair) will forgive me if I do not follow him in detail. He spoke about the next election. I can only say that his speech did not impress me. On the contrary, it increased my conviction that, after the next election, I shall be greeting my eldest son and not the hon. Gentleman as the Member for Sedgefield.
I suppose that, following the Chancellor's statement on Tuesday, there can have been no prizes for guessing that all the headlines on Wednesday would be devoted to the increase in VAT and the £140 reduction for every community charge payer. In my view, that was not the most important lesson to be learnt from the Budget. The Budget was living proof that the Chancellor had refused to succumb to the many temptations that must have surrounded him in recent weeks to relax the stern and strict measures taken with the economy and to return as soon as possible to expansion and a period of lower inflation and interest rates. I was enormously relieved that the prospect of an election some time in the next year did not lead my right hon. Friend into irresponsibility. I am sure that siren voices must have tried to tempt him into taking steps that would not have been wise, and I congratulate him on having resisted that temptation, which must have been great.
My right hon. Friend referred to the prospects for the next year. With regard to economic growth, he said that we should return to an annual rate of 2 per cent. in the year to the end of the first half of 1992; that we can now see the prospect of the end of the current recession; and that, as we have already got two percentage points off the level of inflation, there are prospects of inflation falling to below 4 per cent.
Many people would have said that it was understandable had he succumbed and let off the brakes to the extent


of producing a Budget that was not prudent. I was especially struck by the Chancellor's repeated statements that a tight economic policy will continue. It is true that, nowadays, the room for manoeuvre by any Chancellor of the Exchequer is considerably reduced by Britain's membership of the exchange rate mechanism of the European monetary system. I believe that that is a good discipline for all Chancellors. If, by any chance, we were at any future time to find ourselves with a Labour Government, the discipline of the exchange rate mechanism on that Government's Chancellor—history has shown that Labour Chancellors have always been much more tempted, and have always reacted by moving into the realms of imprudence—would be much greater than is necessary on a Conservative Chancellor.
I was very pleased to hear that it remains the firm intention of the Government to move to the narrow exchange mechanism band as soon as that is prudent and possible. That is good news. Before the Budget, I worried that elements of imprudence might creep in. My worries are considerably abated. I believe that the battle to conquer inflation has not been diminished in any way and that the struggle to preserve honest money is being continued. I welcome the Chancellor's statement that the intention is to achieve a balanced budget over the period of the 1990s. That is certainly good news.
I have always measured Budgets by the reactions of my constituents. I am sure that the people in my constituency will be hugely pleased by the changes in the community charge and by the evolution from the Chancellor's speech about which we heard this afternoon—the creation of a system which, I am sure, will seem fairer to the huge majority of people in this country. I was glad—and I am sure that my constituents will be glad—that the new proposals for the raising of money for local government will continue the concept that everybody should pay something. If we are to switch the raising of funds from local to central revenues, it is far better that that should be done through value added tax than through income tax. Many constituents have written to me saying that there should be such a switch. The great advantage of raising extra revenue centrally through VAT is that it achieves what many of my constituents want—a system that reflects ability to pay. Because of the zero rating of food, rent and fuel, which represent such a high proportion of the expenditure of people on lower incomes, the VAT system gives a good deal of protection to those who are worst off.
My constituents will welcome the community charge changes. Because the proposed system is fairer, the taxes will be easier to collect, and there should not be repetitions of the absolutely outrageous behaviour of various Labour Members of Parliament, as well as Labour party supporters and others throughout the country, who have demonstrated that they have scant respect for the rule of law.
I am pleased that the new arrangements for the community charge will maintain the capping system to control extravagant local authorities that have been holding their charge payers to ransom. In Cumbria we have a grossly extravagant county council, run by a Labour-Liberal consortium, which escaped capping last year by the skin of its teeth but which is still holding the people to ransom by its various extravagances.
Not enough of my constituents have yet understood the pleasant surprises that are in store for them. When they receive their community charge bills for the coming year, they will see the considerable reductions in the charge as a result of the announcements of two months ago. Those reductions will especially help people living in houses which were previously on low rates. They will be even more surprised when they realise that a further £140 will be knocked off their bills.
The Budget's accent on industry will please those people even more. Most of my constituents never forget the role of industry in creating the wealth of the nation, on which everything else depends. The Secretary of State referred to the measures applying to small businesses. I shall not repeat them, except to point out that my constituents have been looking for such action for a long time. I refer to the reduction in tax rates, the help with VAT, the threshold exemption, the relaxation on capital gains tax and the new pay-as-you-earn arrangements. They are all welcome.
I congratulate the Chancellor on having achieved low taxation rates for industry which make this country the most attractive for overseas investors. We now have the lowest taxed industry in the European Community and the United States. As a result of the Budget, the powerhouse of the economy—British industry—will have tremendous opportunities in the coming years to expand and prosper and, as that happens, the nation will expand and prosper.

Mr. Ron Leighton: This truncated debate has been overshadowed in more ways than one by the poll tax debacle—the biggest fiasco in modern political history and a U-turn of staggering proportions. A proud flagship has gone for ever, yet we still have to hear a word of apology or contrition from the Treasury Bench. Any Government with an ounce of shame or decency would have resigned. There is much that I could say about the poll tax, but because of the shortage of time I will leave the matter there and deal with the Budget and the state of the economy.
The Tories have had 12 years in which to implement their policies. After all that time, we are plunged into the depths of an appalling recession with an explosion of mass unemployment. They have had 12 years to get things right—all those years of North sea oil, of £100 billion revenue and selling off state assets—but it has all been squandered. Where is the economic miracle they used to talk about? Where are the apologies to the unemployed? There were 86,500 more out of work last month—86,500 more tragedies.
We were told that inflation was to be the Government's judge and jury and that their aim was to achieve zero inflation. When inflation began to rise, we were told that it was just a blip. It has been blipping ever since. The Government have strangled the economy and brought it to a standstill in an effort to deal with inflation.
We have a record trade gap. When the trade gap went to £1 billion in one month the Government said that it was a freak. It has been a freak ever since. We have record bankruptcies, the highest interest and mortgage rates, the highest house repossession rates, unemployment surging, output down 2 per cent. this year on the Chancellor's own admission, manufacturing output down 5 per cent. this


year, and investment—the seed corn—down 10 per cent. It is an abysmal catalogue of failure. In no other country in Europe is the same thing happening.
The Tories used to talk about the Labour party being a party which might borrow. We have not heard much about that today. This year the Government are borrowing £8 billion and next year they propose to borrow £12 billion. If the Labour party had suggested borrowing that amount, we would have heard more about it. That money is not for investment, but to pay for unemployment and to balance the books. If the Government had restored child benefit to its proper level, they would have had to increase it by £2·30 instead of just 25p for the second and subsequent children.
The Government are a complete failure, not just at the margins but in all important essentials. We have a Government of incompetence and bungling. They should not be allowed to stay in office a moment longer. We need an immediate election to cleanse the country of so abysmal a regime.
I want to refer to some of the evidence taken by the Select Committee on Employment in the past three weeks. There was much else that I wanted to say, but there is not time. Last week the Confederation of British Industry told the Select Committee that unemployment would continue to rise all through next year, reaching at least 2·25 million. The CBI also told us that unemployment would go up for the whole of the following year. So unemployment will be rising for two more years, as far ahead as can be foreseen and certainly up to the next election.
Yesterday the Institute of Directors appeared before the Select Committee and told us that last year it had tried to be optimistic but that it no longer could. I will quote the exact words:
Since 1984 the IOD has done its own bi-monthly survey of member opinion including asking members what their expectations are about economic developments. The February 1991 results are the worst in the life of the survey.
The right hon. Member for Westmorland and Lonsdale (Mr. Jopling) mentioned Europe. In the IOD paper there is a passage on the impact of European Community membership going back to 1970. Hon. Members will recall that in 1970 a White Paper said that the effect of entry on the balance of payments would be positive and substantial. I quote the words of the IOD:
Over the period of 1970 to 1988, UK manufactured exports to the EC rose by 210 per cent. in volume, but imports from the EC grew by 640 per cent. The impact on Britain's trade balance was adverse and severe. Membership of the EC was accompanied by a turnaround in UK manufacturing trade from a surplus in 1970 of £16·2 billion at 1988 prices to a deficit in 1988 of £15·7 billion.
So during that period there was a turn around of £32 billion. The IOD said that the position is worse because in 1970 there was no North sea oil. The IOD also said:
Although many jobs are created by trade within Europe, it is clear from the figures above that more jobs have been lost. This effect has had an impact on most industries in the UK. There is no reason to believe that 1992 will not accelerate this process.
In other words, the Institute of Directors thinks that it will all get worse. In the next paragraph the IOD says:
There is a strong likelihood of a painful period of adjustment to the UK's entry into the ERM".
It also said that European monetary union could exacerbate what it called the marginalisation of the United Kingdom economy.
That is what we were told yesterday by the Institute of Directors, and it came out in the discussions and evidence

that to the extent that our inflation, our productivity and our containment of unit labour costs do not converge with those of Germany—in other words, are not so good as Germany's—we lose competitiveness from day 1 of exchange rate mechanism entry. The IOD fears that our trade deficit unemployment will grow and drew our attention to the experience of East Germany, which changed its currency to the deutschmark but without the same level of productivity and cost as West Germany, leading to the collapse of industry and mass unemployment.
The Select Committee has been interested in the effect on employment of joining the exchange rate mechanism. When we asked the Secretary of State what research had been done on this in the Department, he replied with a letter in which he quoted a memorandum from the director general of the National Economic Development Council and the November 1990 issue of the National Institute Economic Review. That was very worrying because it told us that ERM membership cost France 700,000 jobs and Italy 1 million jobs. Those facts ought to be brought to the attention of the British public rather more widely.
The current issue of CBI News has an article by Professor Douglas McWilliams, the CBI's chief economic adviser. Speaking of the effect on the French economy, he says:
How has the French economy performed since the start of serious EMF membership of 1983? The initial effect was slow growth. French GNP rose by below trend for five consecutive years from 1983–87 with a cumulative shortfall of 4·5 per cent. of growth compared with productive potential. The main feature of this recession was that output was depressed for an unusually long period …
The article went on to say that wages were reduced. It continued:
Nevertheless, reducing inflation still required rather slow growth associated with rising unemployment
—a rise in the number of jobs lost of approximately half a million.
His last paragraph is very revealing and worrying, and all hon. Members should be concerned about it. He says that
the French experience suggests that if British membership of the ERM is successful in reducing inflation it is likely that unemployment will rise to about 500,000 above its 1990 level at some time before 1994. And if Britain is unsuccessful the rise in unemployment could be substantially more than this—perhaps as much as a million or more.
The Institute of Directors told the Committee that the most important thing was training and that the responsibility for training the unemployed and paying for it was with the Government. A fortnight ago our witness was Mr. David Dickinson, the chairman of the group of 10 of the TECs who negotiates with the Government. He said that
the TEC movement appealed very, very strongly to the Secretary of State in the run-up to the last Autumn Review, in that the level of funding should be maintained at last year's level in real terms, and that this should be maintained at least three years to allow the TEC movement to get up and running. In fact, we saw a reduction overall … in the region of 20 per cent. and notably 36 per cent. in money terms in ET, which has given the TECs a major problem. So we think that it is sending the wrong message to the world, to have major cuts in budget.
Mr. Dickinson referred to
a most Draconian average cut of 45 per cent. in real terms … in their adult training budgets.
He then said:
There is a Budget coming up very shortly, and it would be one of the most powerful things for this country if the


Chancellor were to reinstate the training and enterprise budgets at last year's level throughout, which would be three steps similar to the one that has just recently been taken.
The Secretary of State will remember that he recently announced a budget increase of £120 million. Mr. Dickinson told us that the Secretary of State had previously made a cut of £365 million and that the increase announced was only one third of that previous cut. Mr. Dickinson wanted the remaining two thirds. He said:
I think that would be one of the most powerful things to ensure the success of the TEC movement.
That is what the TECs were waiting for and expecting from the Budget, but they did not get it.
What is the result of the TECs being underfunded? Mr. Dickinson said:
Many ET providers will be virtually idle in the second half of 1991 due to the cuts in their funding.
I asked him:
What are we to make of that? What is the significance of that? Do you think that is right? Should we be worried about that?
Speaking on behalf of the TECs, Mr. Dickinson said:
I certainly think the TECs and the Employment Committee and the Government should all be worried about it.
Therefore, not only are workers becoming unemployed, but the trainers are being put on the dole. That is the criticism that the TECs are making of the Government.
We heard evidence yesterday from Judith Donovan—the only female chairperson. She is the chairperson of the Bradford TEC. She said:
In the early days of getting TECs on the road—less than a year ago—the dream was that TECs would negotiate a budget based on what they proposed to deliver in response to local needs. How the mood has changed! We now see a reduced national budget allocated to TECs and scope for negotiation almost nil.
The 30 per cent. cut on employment training budgets announced in January 1991 appears cynical when one looks at the way unemployment has increased within the previous two or three months.
That is the evidence that the TECs and the TECs' chairmen are giving to the Select Committee on Employment. [Interruption.] I have just quoted Judith Donovan, the chairperson of the Bradford TEC. The previous evidence was from David Dickinson, the chairman of the group of 10.

Mr. Howard: The hon. Gentleman is wrong. Mr. Dickinson is the chairman of one TEC, which is not yet operational. He is not chairman of the group of 10.

Mr. Leighton: I suspect that the Secretary of State is probably misleading and confusing himself. Is Mr. Dickinson a member of the group of 10?

Mr. Howard: I am always happy to enlighten the hon. Gentleman. Mr. Dickinson is a member of the group of 10, but he is not its chairman. He made it perfectly plain when giving evidence to the Select Committee, which is chaired by the hon. Member for Newham, North-East (Mr. Leighton), that he was giving evidence in a personal capacity. He holds no representative position.

Mr. Leighton: We have to be a little cautious before we denigrate or speak ill of a chairman of a TEC.

Mr. Howard: rose——

Mr. Leighton: I shall give way in a moment.
The Select Committee on Employment is interested in TECs. We want to be of assistance and we are taking evidence from the TECs. We heard evidence from Mr. Dickinson, the chairman of the east London TECs and a member of the group of 10. He negotiates on behalf of the TECs with the Secretary of State. He is a bona fide witness.
The second person I quoted was the chairman of the Bradford TEC. I hope that the Secretary of State will take notice of those people. Even if he does not listen to me or my hon. Friends, he should listen to the chairmen of the TECs who are complaining about their budgets.

Mr. Howard: Will the hon. Gentleman withdraw his wholly unfounded suggestion that I was either denigrating or speaking ill of Mr. Dickinson for whom I have the greatest respect? I merely sought to point out that the hon. Gentleman had described him inaccurately and was attributing to him a representative capacity that he does not possess. Will the hon. Gentleman now withdraw his remark?

Mr. Leighton: From the evidence given to the Select Committee, I understand that there is a group of 10 and that that group liaises—even negotiates—with the Secretary of State. It told me that it was to have a meeting with the Secretary of State on 18 March. I do not know whether the meeting took place. I have seen reports in the Financial Times, which is usually accurate, stating that the group could not agree with the Minister about the agenda because a new programme was being suggested—a sort of "make work" programme, a resuscitated community programme, a blotting paper exercise to soak up all the extra unemployed. The Secretary of State did not want that on the agenda. I read in the press that, as a result, the group of 10 might not be having a meeting with him. I do not know whether it did.
The Secretary of State must agree that the group of 10 is a bona fide body. Mr. Dickinson described himself as the chairman of that group and it is for the group to decide who is its chairman. However much the Secretary of State shakes his head, Mr. Dickinson is a chairman of a TEC. I have quoted two chairpersons of TECs. It may interest the Secretary of State to know that another panel of three TEC chairmen will appear before the Select Committee. It is right that the House and the country should hear what the TECs are saying. They are criticising the Secretary of State and he knows that. Before the autumn statement they asked him not to cut the budget. It was cut and they asked him to make good the cuts in the Budget, but that has not been done. It is no good the Secretary of State sitting there shaking his head and squirming—he knows that he is on a bad footing.

Mr. Andrew Rowe (Mid-Kent): I am glad to follow the hon. Member for Newham, North-East (Mr. Leighton). I am always glad to follow him because, whatever I say, I am bound to appear more optimistic. His gloom—especially over the European Community—shows how essential it is to reduce inflation and to boost savings. The Budget has set out to do exactly that.
I am also glad to follow the hon. Gentleman because he is the only member of the Labour party present who has any chance of remembering what it was like when Labour was last in office. In its last year in office, it spent two and a half times less on training in real terms than the


Government are spending now. It is also worth remembering that the Labour party has difficulty with the whole business of training.
The hon. Member for Sedgefield (Mr. Blair) complained that the Budget did not contain initiatives to help the young or to help older workers who are unemployed, especially those with a lower level of skill. Yet it is interesting that when the youth training programme was introduced, Labour Members opposed it root and branch. Whenever they speak about it in the House, they give examples of how it is not working. The employment training programme was designed specially to help to bring those people back into the employment market. Perhaps it is not surprising that the present Labour party opposes the introduction of the employment training programme at every possible opportunity. I am not sure what the Labour party wants, although I know what some Labour-controlled local authorities want. No fewer than 13 Labour authorities have withdrawn altogether from the employment training programme.
We know that the Labour party wants a comprehensive system of vocational qualifications. One of the most encouraging features of training now is the move towards national vocational qualifications. An enormous amount of work has already been done and there is a huge amount still to do. I must tell my right hon. and learned Friend the Secretary of State that the National Council for Vocational Qualifications needs to be a little careful about the elaboration with which it defines some of its competencies. It is putting a huge burden on many hard-working people and we may not need to be quite so refined.
The main point about the NCVQ and its work is that, for the first time, we have a way in which to find equivalence in the vast jungle of qualifications, which go from the bottom to the top of the training ladder. By the end of 1992, such qualifications will cover 80 per cent. of the work force. The national vocational qualification is the best instrument that this country has ever had for destroying the peculiarly British disease which rates academic learning higher than vocational learning. The universities already accept people on the basis of their national vocational qualifications. I want that to be carried through so that it covers everyone. We should then achieve the parity of esteem between academic learning and technological and vocational learning which is long overdue.
The Labour party also wants local training consortia. I am not quite sure what they are, but they sound quite like the training and enterprise councils. I am delighted that we are ahead of the Labour party and I am sure that it is pleased, too.
The Labour party also wants a 59 per cent. top rate of income tax—undoubtedly a tremendous stimulus to the economy. It also wants a minimum wage. The issue that has put this country further behind in the training stakes than almost any other is the fact that the money that young people with no qualifications get is far too high a percentage of the money that those who have qualifications can achieve. The Labour party wants to enshrine that for ever by insisting on a minimum wage.
We should talk a little more about the good news. Yesterday, in the Palace of Westminster, I had the honour to give certificates to a number of key trainees who had been successful on employment training and on youth training courses. Their delight at having got their

qualifications and their tribute to the course that had taken them through were a welcome corrective to the rubbish on employment training and on youth training which is spoken in the House day after day by Opposition Members. If I am not mistaken, the Labour party's contribution to youth training would be to abolish it.
We also need to praise the provision in the Budget that has given tax relief to people who buy their own training. That change is long overdue. For far too long, individuals have regarded training as something that should be provided for them by the employer or by the state. Everything that we can do to encourage people to take individual responsibility for that is essential.
As my right hon. and learned Friend would expect, I must tell him that I am disturbed by the threat hanging over some high quality provision from voluntary organisations. I hope that even at this late stage more can be done to help.
The young homeless need to be helped back to work. I ask my right hon. and learned Friend whether there is any scope for using the employment offices to which such people go as their accommodation address. It is nonsense for young people to find themselves caught because they have no address and can get no benefit. If they can get no benefit, they find it difficult to get a job because they do not have an address. That is bureaucratic nonsense and we must be able to overcome it.

Mr. Howard: indicated dissent.

Mr. Rowe: If I have misunderstood, as my right hon. and learned Friend suggests, I am delighted.

Dr. John Marek: We have had a short and truncated debate, but one that was worth having. The statements made before the debate arise out of the Budget and the country will be able to judge the Government's inadequacies as a result of those statements and this debate. I pay tribute to my hon. Friend the Member for Newham, North-East (Mr. Leighton) who, while not being as succinct as he usually is, this evening spelt out what the Confederation of British Industry and the Institute of Directors told the Select Committee. What they said is completely different from what the Government would have us believe that these bodies think about the economy.
I listened to the Secretary of State for Employment in amazement because what he said was "Through the Looking Glass" stuff. Everything in the garden is lovely, there is more training than ever before and more jobs, we are facing the problems of success—where have we heard that phrase before?

Mr. Blair: The Secretary of State has been biting the wrong mushroom.

Dr. Marek: Yes, he may have been biting the wrong mushroom.
We should look at last year's Red Book to see the forecast. These figures have been given before, and I make no apology for repeating them. Last year growth was estimated at 1·5 per cent. in the first half of 1991, but now the forecast is for a fall of 2 per cent. Last year, the Red Book forecast an increase in manufacturing output of 0·75 per cent.; the latest forecast is that it will fall by 5 per cent. Last year, fixed investment was forecast to decline, but not


by much—0·75 per cent.—and now the expectation is of a decline of 9·75 per cent. This is the second worst recession since the war.
No amount of gloss from Ministers will convince one of my constituents that the Government have got it right. Every day, the evening newspaper sets out job losses, losses in training places, general gloom and despondency. Until interest rates fall and the Government do something for employment, as opposed to saying that they will do something while in practice doing little, my constituents will remain unconvinced.
The training programme has been cut by £240 million. At some time in the future, £20 million will be returned, as a result of the Budget, but everyone in my constituency knows that there have been cuts. Great publicity has been given to the difficulties of students who have been on courses. To be fair, the training and enterprise councils are saying that the courses are finished, and that is a good thing, but many trainees do not know if they will get qualifications or whether they will be able to continue their courses.
I have a serious point about this Budget that is exemplified by an article on the front page of The Times today, which is headed:
No tax cuts for four years, Lamont hints.
The Conservative party is keen to tell us that it has been cutting taxes ever since it came into office, but what it means is that income taxes have been cut. Ten or 11 years ago, income tax rates were higher, with a basic rate of 33p.

Mr. Howard: What is the Labour party's policy?

Dr. Marek: The Secretary of State knows perfectly well that Labour party policy is to have a range of income tax rates based on the amount of money that people earn. That is a fair principle that has somehow escaped the Conservative party in relation to the poll tax until, miraculously, this afternoon.
Taxation as a percentage of gross domestic product has been consistently higher under this Administration, since 1979, and it will continue to be so.
Under the previous Labour Government it was only about 33 or 34 per cent.—quite a low figure. As soon as the Conservative Administration came into office, the figure shot up to 38 or 39 per cent. The people of Britain will now realise what we mean by the phase, "taxation as a percentage of gross domestic product", because VAT will increase from 15 to 17·5 per cent. Traders will put prices up and the excuse will be that VAT has risen.
If the article in The Times reported the Chancellor of the Exchequer correctly, there is no prospect of taxation being brought down. The Conservative party is a party of high taxation. [HON. MEMBERS: "No."] Yes, it is. The forecasts are that taxation as a percentage of GDP will remain at 37 per cent. in the next year. Of course, the poll tax will not have helped in any way. That is why at the next general election the Conservative party will be seen by the electorate for what it is. It is empty of promises, incompetent—as the poll tax farrago has shown—and it will be turfed out justifiably.

The Minister of State, Treasury (Mrs. Gillian Shephard): This has been an interesting, if somewhat abbreviated, and intimate debate. I should have liked to comment on the speeches of my right hon. and hon. Friends, but clearly there is no time. I reiterate that the Budget, which is designed to help business, has been warmly welcomed by the Confederation of British Industry, the National Federation of Self Employed and Small Businesses, the Association of British Chambers of Commerce and the Institute of Directors. They all made the point that the Chancellor had listened to what business had to say.
The Budget also helped families by increasing child benefit and it helped the community charge payer. For the information of Opposition Members, a couple receiving the full relief—a total of £280—on community charge would need to spend £13,000 on standard VAT-rated goods to be worse off.
In debates on the Budget attention has rightly been concentrated on major matters and there is no time to speak about the many imaginative measures in the Budget, including the training measures which add to the £2·7 billion already being spent by the Government on training, the £20 billion being spent by employers and the new measures announced by my right hon. Friend the Chancellor, on which I congratulate him. There is no time to go into all those measures.
I wish to make one brief announcement which will be welcomed by the House about help for the disabled with their transport needs. It affects coach operators who have responded positively to the needs of disabled persons by fitting up their coaches to carry wheelchairs. Such operators sometimes laid themselves open to a tax penalty because their vehicles no longer had sufficient seats to avoid paying VAT and car tax. I am delighted to be able to say that not only will such operators no longer have to pay car tax and VAT where only the provision of wheelchair space made them liable but that Customs will consider claims for refunds from operators who have been caught and still have the vehicle.
Opposition Members have convenient memories. In their doom-laden comments they forget that while there is, indeed, a recession it comes after a period of unprecedented growth and that in the three years to 1989 business investment rose by 43 per cent. They forget that from 1981 to 1990 the United Kingdom economy grew by almost 30 per cent. and that in the same period unemployment fell by 1·5 million and jobs increased by 3·25 million. They forget that more people of working age are at work in the United Kingdom than in any other European Community member state. Moreover, they forget that unemployment increased under each and every Labour Government since the war.
Last night we were treated to an impressive and enjoyable display of the operatic knowledge of the hon. Member for Brent, South (Mr. Boateng). We were all greatly impressed by the extent of his knowledge. But tonight the utterances of Opposition Members reminded me of quite another song—Noel Coward's "There are bad times just around the corner".
The Budget has helped business, families, the community charge payer, the disabled and the environment, and it means that good times are just around the corner for Britain and for the Government. The bad times


round the corner will be for the Opposition. They long for an election, but so do we, because when it comes we know that the electorate will see the Opposition's outworn and unconvincing policies for what they are.

Debate adjourned.—[Mr. Boswell.]

Debate to be resumed tomorrow.

Orders of the Day — Auxiliary Coastguard Service

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]

10 pm

Mr. David Harris: It is almost eight years since I made my maiden spech on the controversial subject of coastguard reorganisation—and at that time the Chamber was as full as it is now, that also being an Adjournment debate.
The debate that I am now initiating is about the review which the Government plan to put in hand into the whole question of the sectoral organisation of Her Majesty's coastguard, and particularly the auxiliary coastguard service. I made my maiden speech against the background of the Penlee disaster and, of course, the Penlee lifeboat was based in my constituency. After that disaster there was considerable concern about the reorganisation of the coastguard service in the south-west and especially in Cornwall.
In my maiden speech I asked for certain assurances, particularly about the retention of regular manning of the three remaining look-outs manned by auxiliaries in my constituency. The manning arrangements for those look-outs are unique because they are the only ones in the country that are regularly manned. The three look-outs are at Gwenap head, which is near Land's End and is manned for 24 hours a day every day of the year, the Lizard, which is manned for 12 hours a day, and St. Ives, which is manned for six to eight hours a day.
In reply to that debate, my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell), who was then the Minister for Shipping and Public Transport, assured me that I would be given prior warning of any change that was contemplated in the manning arrangements of those look-outs. In accordance with that pledge, my hon. Friend the present Minister for Shipping, who I am glad to say will reply to this debate, wrote to me on 23 January saying that there was now a possibility that regular manning would be stopped at those three look-out stations. He told me that a few days later he would announce in a written answer that there had been an internal review into the auxiliary coastguard station and that there was a question mark over the future of the three look-out stations.
I informed my hon. Friend right away of my total opposition to the possible abolition of regular manning at those stations. I base my argument for their retention on the simple fact that by any yardstick my constituency is remarkably exposed and has a very dangerous coastline. That fact is emphasised by another fact, that there are five major deep sea lifeboats—not rubber duck lifeboats—in my constituency. That is far more than in any other constituency in Britain. This all stems from the geographical position of the constituency, which juts out into the Atlantic and takes in the Isles of Scilly, Iand's End, the Lizard and quite a large slice of the north coast of Cornwall.
As a result of the warning that the Minister kindly gave me, in accordance with the pledge, I was able to alert local people and others to the threat hanging over these three look-outs, and to the fact that a review was in progress. A few days later that review was announced in a written answer to my hon. Friend the Member for Isle of Wight (Mr. Field) in what can only be described as a rather bland


reply, in which the Minister said that he had deposited in the Library an eight-page summary of the internal review document.
I would not quarrel with parts of the document. I am not arguing that it was not necessary to hold such a review. From time to time in any organisation it makes sense to see how it is working. I am, however, certainly arguing against one of its recommendations—about the three look-outs I have mentioned—and I certainly want to ask questions about the way in which the review has been and is being conducted.
Because I drew local attention to the situation, I received many letters, as did my hon. Friend the Minister, and as did the regional controller of the coastguard, Commander David Eliot. I pay tribute to him; he has a job to do and I do not mean in any way to criticise him.
I have had letters from honorary secretaries of lifeboats in my constituency. I have received many letters from the sea fish industry committee of the county council, from fishermen, from the Cornish Fish Producers Organisation and from the South West Hand Liners Association. Fishermen are extremely worried about the proposals for the look-outs and about the review in general.
I have also had letters from all the councils involved—from, for instance, St. Ives town council, which was aghast at suggestions that the busy holiday town of St. Ives might lose its look-out, which keeps a weather eye on what is happening at sea and on what is happening to the holiday beaches of the town. There have been four fatalities in St. Ives this year alone. The holiday industry there is dismayed by the prospect of anything happening to the look-out or of its hours being reduced.
Others are also worried about the operation. As the weeks have gone by other hon. Members have become aware of it, I suspect partly because of representations from the auxiliary coastguards to the effect that such a move was afoot. I am delighted to see the hon. Member for Truro (Mr. Taylor) in his place. I hope that he wil be able to catch the Chair's eye later to voice the concerns of his constituency.
I am convinced that if I had not been granted my previous Adjournment debate or been given my pledge some years ago, much of this would have happened without people knowing it. I am sorry to say that even now we do not know the full details of what is being contemplated. In a series of written questions I asked the Minister if he would place in the Library a copy of the full document of the internal review. I hope that my hon. Friend the Minister will change his mind tonight and will make that document available to hon. Members in the Library.
I hope that, once the regional controllers put forward their detailed proposals on how to implement the review—that is the task that they have been given—hon. Members and others will be told exactly what is being proposed. I am sorry to say that my hon. Friend the Minister felt that he could not agree to that. He said, perfectly reasonably, that it is not usual for the advice of civil servants or officials to be made public and I understand that. However, my plea tonight is that he will change the Government's attitude toward the conduct of the review that he hopes to implement within a couple of months.
People must be told exactly what the Government have in mind. I do not mean simply the proposals in the intial document but what will be proposed by the regional controllers, what my hon. Friend the Minister decides as a result of those proposals, and what will happen to the structure of the auxiliary coastguard service. Some 4,400 auxiliaries, who are dedicated volunteers, are now stationed around the coastline of the United Kingdom. I do not know—my hon. Friend the Minister says that he does not know either—how many will be in place once the review has been implemented. I am sure that their number will be reduced, and I suspect that the reduction could be considerable.
According to the summary document, the review recommends that the deployment of auxiliaries should be changed. It rightly says that the present disposition is largely based on historical factors. In many areas, the position has probably changed but it is being suggested that, instead of companies of auxiliaries placed with some frequency around the coastline, a fast response team of two or four men would go out and assess emergencies. There would also be a back-up team that could be called out for serious emergencies. I suspect that there may be a very long coastline between one back-up team and the next, and that it may take some time to summon sufficient response to serious emergencies.
It is the job of regional controllers to make detailed proposals, and it is imperative that all interested and concerned organisations should know exactly what is being proposed before my hon. Friend the Minister makes his final decision. In statements earlier today, other Ministers said that they had consulted widely on matters of great importance to the country's future. I hope that there will be wide consultation on this matter so that people can give their expert judgment on the suggestions.
People should be consulted not just because it makes good sense but because my hon. Friend the Minister knows perfectly well that past reorganisation of the coastguard service has been highly emotive and controversial. I do not need to remind him, for example, of the recent controversy over the closure of the Hartland coastguard station. I am desperately afraid that, unless he adopts an open approach on this issue, people will be, and may have good grounds for being, suspicious about it. Therefore, it is in everyone's best interests for my hon. Friend the Minister to adopt the open approach that I am advocating tonight.
The auxiliaries are dedicated volunteers who are paid little money but care desperately and passionately about the service that they provide. They are in a difficult position because they rightly feel that they cannot speak out. It is to their credit that they have not gone rushing off to the papers to spread scare stories; they are highly responsible men and women. I have contacts with them and I know how responsible they are and how some of them feel about what might be in the air.
I do not think it is fair on the auxiliaries or their officers, particularly the regional controllers, to be the subject of unfair criticism over the review. Therefore, I plead with my hon. Friend the Minister to hide nothing and, once he has received the advice and recommendations of the regional controllers and made up his mind on how the review should be implemented, will tell not just Members of Parliament, but the public, certainly those who feel strongly about this issue, who should know exactly what is being proposed. My hon. Friend the Minister has been


kind enough to offer me, and no doubt other hon. Members, meetings to discuss the matter. I do not want us to be presented with a fait accompli through a written answer.
I know that my hon. Friend the Minister has listened carefully, and I hope, with confidence, that he will heed what I have said tonight. I believe that I am speaking for many people, many hon. Members and, more importantly, for all those people around the coastline who regard the coastguard service as an absolute necessity and believe that any changes made to its organisation and structure should be approached with the greatest care and completed in a totally open manner.

Mr. Matthew Taylor: I thank the hon. Member for St. Ives (Mr. Harris) for giving me the opportunity to speak now and for raising the issue in the House, having won the opportunity to debate it. It is an important issue that, ultimately, boils down to life saving. I heartily endorse everything that the hon. Gentleman has said tonight and about which he has been campaigning for some time.
I have some direct experience of the situation in the hon. Gentleman's constituency because I was present and summoned the rescue services to a drowning on the other side of St. Ives bay some years ago when I was 16. The person was taken out of the water alive but, sadly, died later in hospital. That incident gave me a direct appreciation of exactly what goes on in such circumstances.
The essential point being put tonight relates to the three look-out posts. They are not in my constituency and I can simply support what the hon. Gentleman said. More generally, the debate deals with the nature of the review that is taking place. My concern relates partly to my constituency but also to national issues. It is not so long since the awful situation in north Devon raised considerable concern. People are worried whenever there is perceived to be a threat to the local service and the local knowledge that it provides in emergencies.
The case in the Mevagissey district which hit the headlines was precisely the same as that just described, but nothing was made public officially. Information began to come out in dribs and drabs about what was to be proposed. First, we were told that the look-out post would go. I now understand that it will remain at Mevagissey, but with a 50 per cent. cut in manning levels on that section of coast and a 50 per cent. extension of the area of coast to be covered. That naturally makes the coastguards concerned about the question of rapid response, particularly given their current aim for a 20-minute response time. They are now told that the target will be 30 minutes. I understand that Ministers hope to even up as well as down, so that the 30-minute response time will apply everywhere. Currently, it does not exist in every area, but naturally in a district where the response time is estimated to be 20 minutes an increase in that time is a matter of considerable concern.
I hope that the Minister will respond to the point that the hon. Member for St. Ives made that any proposals should be made openly so that people know what is going on and can express their concerns locally before finding out that an announcement has been made.

The Minister for Shipping (Mr. Patrick McLoughlin): First and foremost, I congratulate my hon. Friend the Member for St. Ives (Mr. Harris) on securing this Adjournment debate. I am aware of the deep feelings in his constituency about the coastguard service and of his great interest in the service.
My hon. Friend mentioned the Penlee lifeboat disaster, which had a tremendous effect on the nation and lives in its mind. In the few minutes remaining, I should like to answer as many points as possible that my hon. Friend made.
I was surprised by the hon. Member for Truro (Mr. Taylor) saying that information leaked out in dribs and drabs. The review was carried out, and when I released it to the trade unions I felt it right to answer a question in the House and place a summary of the recommendations in the Library. I thought that the summary went some way to answering some of the points, but I will deal with the specific point that my hon. Friend the Member for St. Ives made.
Before discussing the review's findings, it may be helpful to explain what the sector organisation is and how it relates to the rest of the coastguard service.
The primary function of the coastguard is to provide a maritime search and rescue co-ordination service by maintaining 24-hour radio distress and 999 emergency telephone watch at 21 centres around the United Kingdom. From those stations, the majority of emergency incidents are co-ordinated, using whatever rescue resources are available to the coastguard from a variety of sources. That is an important point. That aspect of the coastguard's role is not covered in the review.
The sector and auxiliary organisation represents another arm of the service that provides on-the-spot coastal support to operational centres, with about 100 full-time sector officers supported, as my hon. Friend said, by 4,500 auxiliary coastguard volunteers. That aspect of the service was under review.
The auxiliary coastguards are volunteers, but normally they are called out for only a few hours each month for exercises or training. They provide an ever-ready band of enthusiastic men and women who unstintingly give their time to assist the regular coastguard service. Although they are only one component of the United Kingdom's search and rescue organisation, they remain a valuable asset in providing an essential coastal response and local knowledge. I join my hon. Friend the Member for St. Ives in paying tribute to their unstinting and important work for our coastguard service.
The sector and auxiliary organisation was set up following the reorganisation of the coastguard, as recommended by the Lavers report of 1974. The number of sectors and the size and location of auxiliary companies, which were established mainly to man breeches buoy rescue equipment, undoubtedly met the requirements of the day, but the situation on the coastline has changed in the intervening years. There has been a marked decrease in the number of vessels that, formerly, were wrecked around our coasts, but an increase in the number of leisure-related incidents involving holidaymakers and pleasure craft. The requirement to rescue stranded mariners by breeches buoy has been replaced by the greater availability of all-weather helicopters and fast lifeboats. In some cases, it must be


accepted that the disposition, size and coverage provided by the coastguard coastal sector organisation is based on historical rather than current requirements.
I therefore consider that the review is timely and will give an opportunity to assess the efficiency and effectiveness of the coastguard's response in meeting current requirements. As my hon. Friend the Member for St. Ives said, there were several aspects of the review with which no one would argue, such as setting out the role of the coastguard and trying to achieve more regular response times.
The review is wide ranging in its scope. It considers the coastguard's coastal commitments, responsiveness, the sector organisation, the sector officer's tasks, the coastguard auxiliary service, transport, both ashore and afloat, equipment including communications equipment, training requirements, and associated administrative functions and methodology.
The coastal commitments of the coastguard have evolved over the years. Currently, they consist of an amalgam of statutory duties, non-statutory duties, habitual and traditional tasks. The role and objectives of the service need to be clarified and widely promulgated. Accordingly, the review addresses those issues.
Future requirements for manpower and equipment cannot be determined without target performance standards. The time from call-out to achieving a presence on scene depends on a variety of factors, including local geography, population density, potential for incidents and their frequency and the availability of other emergency resources. It will be appreciated that some of those factors are not necessarily quantifiable. I shall therefore be looking for a result that is realistic and practical. The review recommends certain response criteria which will provide a base line for assessing whether coverage is satisfactory in each area around the coastline.
Our coastline varies and different responses are needed. At some times of the year, a tremendous number of holidaymakers visit St. Ives and at other times of the year it is not so busy. We must get the balance right. I accept the importance of this issue to the constituents of my hon. Friend the Member for St. Ives and of the hon. Member for Truro.
The local knowledge of sector officers, coupled with their operational availability and expertise, is an essential part of the coastal response and will continue to be so. The review examines their job description and draws attention to the fact that, although some officers are fully stretched, others could accept a greater range of tasks with no detriment to the service. This is therefore one of the matters that regional controllers will assess.
Auxiliary coastguards form a vital part of the coastguard service. Auxiliary coastguards, both men and women, undertake a wide variety of tasks on a voluntary basis to serve the local community and the mariner at large. Some auxiliaries are trained to work as radio operators in operation centres, but with the demise of the breeches buoy, the majority are now organised into teams trained in cliff and mud rescue techniques and shoreline searches and trained to provide vital intelligence as well as providing on-the-spot co-ordination when necessary. In some cases, the size and location of these teams is still based on historical, rather than current, requirements, so

regional controllers are now examining where coverage needs to be improved to meet the response criteria and, conversely, where savings could be made.
The important issue of look-outs worries my hon. Friend the Member for St. Ives. The Lavers report concluded that a visual distress watch was not cost-effective, with only a very small percentage of incidents observed directly by coastguards from fixed look-outs. Since the end of the 1970s most of those look-outs have been phased out and the coastguard has maintained radio distress watch at its operations centres, the remainder of reports being received from the 999 emergency telephone system.
However, in casualty risk situations and in special circumstances, some form of visual watch may still be necessary. Rather than rely upon fixed look-outs with restricted areas of visibility, this need can perhaps best be satisfied by the use of fast response vehicles with appropriate radio communications and rescue equipment able to travel quickly to those parts of the coastline which a fixed look-out is unable to cover. The review therefore recommends reconsideration of the case for retaining the three fixed look-outs.
The review also considers whether the payment of out-of-pocket expenses to auxiliaries can be improved and simplified. It is also appreciated that there is need for auxiliary coastguards to be recognised by the public at large while performing their essential duties. An examination of the uniform requirements is therefore to be undertaken.
The review is a consultation document. No decision has been taken. I have insisted on full consultation at local level with interested parties before recommendations to implement the review are made. This process is under way nationwide. I am sorry that my hon. Friend the Member for St. Ives feels that there has been some secrecy. There should not have been any secrecy and I would deeply regret it if that had occurred. I intended to make the review as widely available as possible, which is why I published the summary.
Since the review was published in January, my officials have received a large number of contributions, most of which have been constructive. Understandably, many people wish to be assured that there will be no reduction in the coastguard's ability to provide an adequate response to emergencies along our coastline. It is also pleasing to note that, in general, the review has been welcomed by the coastguard service as a whole, which sees it as providing a sensible framework on which to build for the future.
I look forward to receiving the advice of coastguard regional controllers—through the Chief Coastguard—on how the review findings may be applied to their particular region. I have already agreed to meet my hon. Friend the Member for St. Ives and other hon. Members before I make a decision, which will probably be in June.
My hon. Friend the Member for St. Ives asked me to put a full copy of the review in the Library. I did not do so in the first place because it went into a lot of technical detail. Following my hon. Friend's strenuous representations, I shall certainly place a full copy in the Library.
I know that the House reaffirms its support for our coastguard system. We must all ask ourselves how to provide the best service and the best coastal rescue system for our entire coastline. There is a lot of it. It varies and different responses are needed in different areas. I hope that, with the commitment of my hon. Friend the Member


for St. Ives and other hon. Members, we will get it right so that we have the best possible coastguard service, meeting the needs of all the constituencies along our coastline and of all those constituents who use our coast and may need to use our coastguard service.
The motion having been made at Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.